Senator Menendez Joins Senator Brown, Rep. Sherman on Bill to Help Wells Fargo Victims Get their Day in Court

Senator Menendez Joins Senator Brown, Rep. Sherman on Bill to Help Wells Fargo Victims Get their Day in Court

Bill Would Prevent Wells Fargo from Using Forced Arbitration Clauses in Real Accounts to Block Customers from Suing over Fraudulent Ones

WASHINGTON, D.C. — Today, U.S. Senator Bob Menendez (D-N.J.) member of the Senate Banking Committee, joined Ranking Member Sherrod Brown (D-Ohio) and U.S. Representative Brad Sherman (D-Calif.) to introduce legislation that will give victims of Wells Fargo fraudulent account scheme their day in court. Wells Fargo is using the forced arbitration clauses in the fine print of contracts customers signed when they opened legitimate accounts to block them from suing over the fraudulent accounts.

“Wells Fargo is once again trying to avoid being held accountable for their fraudulent actions,” said Menendez. “If customers signed one form for a real account, that signature should carry no weight for a fake account they never knew was opened.”

“Forced arbitration is shielding Wells Fargo from being held accountable for tanking customers’ credit scores and charging them fraudulent fines,” said Brown. “Wells Fargo’s customers never intended to sign away their right to fight back against fraud and deceit. We need to give customers back their ability to seek justice in court so they can be made whole again.”

“I want to thank Senate Banking Committee Ranking Member Sherrod Brown for working with me to introduce the Justice for Victims of Fraud Act of 2016. This bill will give defrauded Wells Fargo customers the opportunity for their day in court,” said Sherman. “If customers never authorized the opening of a phony credit card or checking account, there is no reason they should be bound by the arbitration agreement they were forced to sign when they set up their legitimate account.”

The Justice for Victims of Fraud Act of 2016 will work hand-in-hand with a new oversight rule that the Consumer Financial Protection Bureau (CFPB) put out in May to strengthen protections for consumers. Whereas the CFPB proposal would apply only to contracts signed after the rule is final – this bill would allow victims of Wells Fargo’s fraud to seek their day in court even if they signed contracts that included arbitration for their legitimate accounts in the past.

The bill is cosponsored by U.S. Sens. Patrick Leahy (D-Vt.), Patty Murray (D-Wash.), Richard Durbin (D-Ill.), Jack Reed (D-R.I.), Robert Casey (D-Penn.), Jon Tester (D-Mont.), Mark Warner (D-Va.), Jeff Merkley (D-Ore.), Al Franken (D-Minn.), Richard Blumenthal (Conn.), Mazie Hirono (D-Hawaii), Elizabeth Warren (D-Mass.), and Heidi Heitkamp (D-N.D.).

The bill has been endorsed by The American Association for Justice, Consumers Union, the National Association of Consumer Advocates, the National Consumer Law Center (on behalf of its low income clients), Americans for Financial Reform, the Center for Responsible Lending, the National Association for the Advancement of Colored People (NAACP), Media Voices for Children, Allied Progress, the Woodstock Institute, the Franciscan Action Network, the Economic Policy Institute Center, California Reinvestment Coalition, Consumers for Auto Reliability and Safety, National Consumers League, and Public Justice.

Senator Menendez has repeatedly raised concerns about Wells Fargo’s treatment of their customers, as well as employees. He joined Senators Bob Casey, Elizabeth Warren and Sherrod Brown on a letter to the Financial Industry Regulatory Authority (FINRA) requesting an expedited review for Wells Fargo whistleblowers and other unfairly terminated employees in order to clear termination notices which may have contained negative comments in retaliation for their attempts to report or resist fraud.

Senator Menendez also led a letter with Senator Elizabeth Warren questioning how much Wells Fargo’s new CEO, Tim Sloan, knew about the fraudulent sales tactics that occurred while he was COO.