Despite Wells Fargo Enforcement Action, Republicans Remain Wary of CFPB

Wells FargoDon’t expect the Republicans to jump on the CFPB train anytime soon.

While the Republican-controlled Senate Banking Committee wasted no time in scheduling a Sept. 20 hearing on the bureau’s enforcement action targeting Wells Fargo’s aggressive sales tactics, congressional Republicans remain skeptical of the CFPB’s efficacy. Republicans want to hear from Wells Fargo Chief Executive Officer John Stumpf and CFPB Director Richard Cordray as to whether the CFPB uncovered wrongdoing or merely acted on information the bank disclosed.

The Republican-controlled House Financial Services Committee, meanwhile, announced Sept. 16 that it is launching an investigation into the Wells Fargo matter.  At the same time, however, House Republicans are attempting to restructure the CFPB through the Financial Choice Act.  Earlier this week, the Financial Services Committee voted 30-26 in favor the act, which would turn the CFPB into a five-person commission and subject the bureau to congressional appropriations.

Wells Fargo was fined Sept. 8 by the CFPB and other authorities over allegations employees secretly opened more than 2 million unauthorized accounts to hit sales targets. The bank agreed to pay $100 million to the CFPB, $35 million to the Office of the Comptroller of the Currency, and $50 million to the city of Los Angeles, plus $5 million in remediation to customers. The $100 million penalty to the CFPB is the largest imposed by the regulator to date.