Sen. Elizabeth Warren (D-MA) urged the Federal Reserve to break up Wells Fargo, pointing to the persistent stream of scandals pouring forth from America’s third largest bank by assets.
Warren, who sits on the Senate Committee on Banking, Housing, & Urban Affairs, sent a letter Monday to Federal Reserve Chairman Jerome Powell asking him to revoke one of the key operating licenses to force a split between Wells Fargo’s banking and Wall Street businesses.
“Every single day that Wells Fargo continues to maintain these depository accounts is a day that millions of customers remain at risk of additional negligence and willful fraud,” Warren said in her letter. “The only way these consumers and their bank accounts can be kept safe is through another institution—one whose business model is not dependent on swindling customers for every last penny they can get.”
This is my shocked face that @WellsFargo is cheating their customers again. Giant banks will only clean up their act when their executives know they'll face handcuffs when they preside over massive fraud. Let’s pass The Ending Too Big to Jail Act.https://t.co/i6kcsZpkFY
— Elizabeth Warren (@SenWarren) September 10, 2021
“The Fed has the power to put consumers first, and it must use it,” the senator added.
“We are a different bank today than we were five years ago because we’ve made significant progress,” Wells Fargo said in a statement sent to Breitbart News.
If the Fed ends up using its authority to “protect consumers and the financial system and requiring Wells Fargo to separate its consumer-facing banking arm from the rest of its financial activities,” it will be able to guarantee the company will face the consequences, Warren said.
Warren explained that Wells Fargo was placed under an asset cap in 2018 when the Fed was under Janet Yellen for its “widespread consumer abuses and other compliance breakdowns.”
Additionally, she wrote that the Office of the Comptroller of the Currency last week found the company’s management of its mortgage business was so bad that it might have incorrectly foreclosed on some borrowers’ homes.
“Wells Fargo received a $250 million fine and a stinging rebuke from a banking regulator on Thursday for failing to fix problems in its mortgage business,” New York Times reported.
The senator outlined other examples of Wells Fargo’s misconduct in her letter.
Follow Jacob Bliss on Twitter @jacobmbliss.