Senator Elizabeth Warren of Massachusetts has asked Wells Fargo’s interim chief executive to explain the bank’s policies for charging overdraft fees on transactions in accounts its customers believed to be closed, costing them hundreds or even thousands of dollars.
In a letter to C. Allen Parker on Monday, Ms. Warren asked how much money the bank had collected over the past five years by charging overdraft fees on empty accounts past the dates on which accounts were supposedly closed. The practice was disclosed in a New York Times article last week.
Ms. Warren, one of the banking industry’s harshest critics and a candidate for the Democratic presidential nomination, suggested the zombie account problem indicated that Wells Fargo had not lived up to its promises to fix its corporate culture. A series of scandals in recent years has sullied the bank’s once-sterling reputation and cost it more than $1.5 billion in penalties.
“These new revelations raise grave concerns that despite these assurances, Wells Fargo is still fundamentally broken and has not only continued to scam customers out of thousands of dollars with impunity, but has even targeted customers who were attempting to leave the bank — and may have been victims of previous scams — to unfairly collect one final set of lucrative fees for Wells Fargo,” Ms. Warren wrote.
Wells Fargo has been operating under a growth freeze imposed early last year by one of its regulators, the Federal Reserve, after the bank was caught in scandals that included secretly opening accounts in customers’ names, forcing financial products on them and charging them unnecessary fees.
The bank has remained a frequent target of lawmakers and regulators since settling investigations into those and other problems. Mr. Parker took over the company after Timothy J. Sloan abruptly resigned in March following a hearing at which Mr. Sloan was closely questioned about the bank’s lingering corporate culture problems.
The Times article published last week revealed the bank had continued to collect fees on supposedly closed accounts even though two employees complained it was hurting some of Wells Fargo’s most vulnerable customers.
Wells Fargo acknowledged on Monday that it had received Ms. Warren’s letter, but did not provide further comment.
The letter also asked for information that would help illustrate how widely known the issue was inside the bank, such as when employees first realized it existed and whether it had been described to regulators.
Ms. Warren asked for a response by Sept. 3.