WASHINGTON, D.C. – Seeking to protect military families and active duty military personnel whose consumer rights may have been violated by Wells Fargo, U.S. Senator Bob Menendez (D-N.J.) joined a group of his Senate colleagues including Jack Reed (D-RI), the Ranking Member of the Armed Services Committee, Richard Blumenthal (D-CT), the Ranking Member of the Veterans’ Affairs Committee, and Sherrod Brown (D-OH), the Ranking Member of the Banking Committee, in calling on Wells Fargo to step up compliance with the Servicemembers Civil Relief Act (SCRA).
The letter comes on the heels of Wells Fargo being fined a total of $24.1 million by the U.S. Department of Justice and the Office of the Comptroller of the Currency (OCC) for the bank’s alleged violations of the SCRA. The SCRA was designed to ease financial burdens on servicemembers during periods of military service. For example, the SCRA includes provisions that prohibit the eviction of military members and their dependents from rental or mortgaged property, and the law caps interest at 6% on debts incurred prior to an individual entering active duty military service. In addition, under the SCRA, a court order is required before repossessing a vehicle belonging to a member of the military, if the servicemember took out the loan and made a payment before entering military service.
“We are extremely disappointed to learn of the SCRA announcement. Combined, these abuses indicate that Wells Fargo has actually made it more difficult and stressful for our service members and their families by violating the very rights they have fought and continue to fight so hard to secure. We are also concerned about potential compliance issues related to the Military Lending Act (MLA), including new rules that took effect on October 3,” the Senators wrote to Wells Fargo CEO John Strumpf and members of the Board of Directors.
In addition to Menendez, the letter was also signed by U.S. Senators Jack Reed (D-RI), Richard Blumenthal (D-CT), Sherrod Brown (D-OH), Chuck Schumer (D-NY), Dick Durbin (D-IL), Patty Murray (D-WA), Mazie Hirono (D-HI), Jeff Merkley (D-OR), Elizabeth Warren (D-MA), and Bernie Sanders (D-VT).
The Senators demanded answers to several questions, including:
A copy of the letter follows:
October 5, 2016
John G. Stumpf
Chairman and Chief Executive Officer
Wells Fargo and Company
420 Montgomery Street
San Francisco, CA 94163
Dear Mr. Stumpf:
We write to question Wells Fargo’s commitment to the well-being of our service members based on Wells Fargo’s inability to ensure compliance with the Servicemembers Civil Relief Act (SCRA).
As you may be aware, our country has a strong tradition of ensuring our service members are protected while they sacrifice to keep our nation safe. Building on such efforts, Congress passed the Soldiers’ and Sailors’ Civil Relief Act as World War II escalated to provide crucial financial protections for service members to “enable such persons to devote their entire energy to the defense needs of the Nation.” Now called the SCRA, this law includes such protections as prohibiting the eviction of service members and their dependents from rental or mortgaged properties and capping interest at 6 percent on debts incurred prior to an individual entering active duty military service.
Indeed, Wells Fargo acknowledges the importance of the SCRA on its web-site by stating “Wells Fargo appreciates the service of America's military personnel. That's why we offer expanded mortgage benefits that go beyond what the SCRA requires.” It appears to us that rather than going beyond what the SCRA requires, Wells Fargo has systematically, over the past ten years, failed to live up to the basic requirements of the statute.
On September 29, 2016, Wells Fargo settled with the Justice Department (DOJ) for “$4.1 million to resolve allegations that it violated the SCRA by repossessing 413 cars owned by protected service members without obtaining a court order.” Related to the DOJ settlement, Wells Fargo paid a $20 million penalty to the Comptroller of the Currency (OCC) because it “found that between approximately 2006 and 2016, [Wells Fargo] violated three separate provisions of the SCRA.” This is not Wells Fargo’s first SCRA violation. In 2012, Wells Fargo settled with the Federal Government and State Attorneys General from across the country for foreclosure violations including violations of the SCRA. Wells Fargo alone agreed to distribute $87.7 million to 720 eligible service members. These serious violations contradict Wells Fargo’s claim that it values our service members. Indeed, these violations undermine the financial readiness of our troops, making it more difficult for them to devote their full energy to their military service and the Nation’s defense.
Considering the settlements announced on September 8th against Wells Fargo by the OCC, Consumer Financial Protection Bureau, and the City of Los Angeles for opening unauthorized deposit and credit card accounts for your customers, we are extremely disappointed to learn of the SCRA announcement. Combined, these abuses indicate that Wells Fargo has actually made it more difficult and stressful for our service members and their families by violating the very rights they have fought and continue to fight so hard to secure. We are also concerned about potential compliance issues related to the Military Lending Act (MLA), including new rules that took effect on October 3. Given these troubling developments, we would appreciate answers to the following questions:
We would appreciate a response by October 27, 2016.
Sincerely,
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March 12, 2024