Exclusive: Wells Fargo account scandal extends to small business - U.S. senator

Wed Oct 5, 2016 7:27am EDT
 
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By Suzanne Barlyn

NEW YORK (Reuters) - The scandal over improper sales practices at Wells Fargo & Co extended to thousands of small-business owners, according to a U.S. lawmaker, raising questions about the scope of the bank's issues with unauthorized accounts.

In a Sept. 29 letter viewed by Reuters on Tuesday, Sen. David Vitter, a Louisiana Republican, demanded that Wells Fargo Chief Executive John Stumpf provide a "full accounting" of customers affected. Vitter is a member of the U.S. Senate's banking committee and also heads its small business committee.

Discussions between congressional staffers and Wells Fargo "have indicated that the fraudulent activity of your employees was not limited to Wells Fargo's consumer banking operations," Vitter wrote. "Thousands of small business owners were impacted by this fraud."

A person familiar with Vitter's probe say Wells has identified about 10,000 small business accounts that were subject to improper practices. Vitter spokeswoman Cheyenne Klotz declined to comment on specifics about those practices.

Revelations of Wells Fargo's problems with small-business customers come almost a month after it reached a $190 million settlement over opening as many as 2 million accounts in retail customers' names without their knowledge. The bank has said it fired about 5,300 employees for improperly opening the accounts.

The disclosures have caused a public furor, with Stumpf facing heated questions before two congressional committees and other U.S. authorities launching investigations into the bank's sales practices, including the Justice Department and the Labor Department.

"While the vast majority of accounts in the settlement were consumer accounts, to the extent there were small business accounts included, all were previously reported in the total number of potentially impacted accounts," said Wells spokeswoman Jennifer Langan. "As stated earlier, Wells Fargo has already refunded 115,000 accounts. The impacted accounts, including Small Business, were part of our Retail Bank business."

A Consumer Financial Protection Board spokesman contradicted the Wells statement, however, saying its figure of nearly 2 million accounts being affected did not include small business accounts.   Continued...

 
A Wells Fargo Bank is shown in Charlotte, North Carolina, U.S., September 26, 2016. REUTERS/Mike Blake