Federal official defends handling of Wells Fargo case

The federal government’s consumer financial watchdog is defending his handling of the Wells Fargo & Co. unauthorized accounts scandal in the face of Republican charges that the agency failed to catch the problem and has stymied a congressional investigation into how it handled the case.

Richard Cordray, director of the Consumer Financial Protection Bureau, said he is “quite proud” of the team that looked into Wells Fargo’s sales abuses.

“Clearly our team, along with our partners, has performed a tremendous public service here,” Cordray wrote last week to Rep. Jeb Hensarling, R-Dallas, chairman of the House Financial Services Committee.

The letter is the latest salvo in an acrimonious battle between Cordray, a Democrat who heads the powerful agency created in the aftermath of the 2008 financial crisis, and Hensarling, who has called for President Trump to fire Cordray and is pushing legislation gutting the bureau’s power.

Hensarling’s bill, which passed the Republican-controlled House on a party-line vote this month, would strip the bureau of its ability to closely monitor financial firms for compliance with consumer protection laws and eliminate public access to the bureau’s database of consumer complaints, among other changes.

The letter was first reported by the Wall Street Journal.

In September, Wells Fargo agreed to pay $185 million to settle investigations into its sales practices by the bureau, the Office of the Comptroller of the Currency and Los Angeles City Attorney Mike Feuer. The bank did not admit any wrongdoing but said its employees had opened millions of checking, savings and credit card accounts that customers never authorized.

The scandal was made public by the Los Angeles Times in December 2013.

Congressional Republicans have charged that the consumer bureau failed to catch Wells Fargo’s problems until The Times brought it to light and Feuer began an investigation that culminated in a 2015 civil lawsuit.

“The only conclusion there is to draw regarding the Wells Fargo scandal is the CFPB was asleep at the wheel,” Rep. Ann Wagner, R-Mo., told Codray during a contentious April hearing.