Wells Fargo says law bars L.A. suit

Los Angeles Times - - BUSINESS BEAT - By E. Scott Reckard scott.reckard@la­times.com

Fed­eral law pre­cludes the city of Los An­ge­les from su­ing Wells Fargo & Co. on be­half of Cal­i­for­ni­ans stuck with un­wanted ac­counts and bo­gus fees, the San Fran­cisco bank ar­gued in its ef­fort to toss out the con­sumer pro­tec­tion law­suit the city brought against it.

Laws dat­ing to the Na­tional Bank Acts, adopted in 1863 and 1864, mean that banks like Wells Fargo are accountable only to fed­eral reg­u­la­tors, the bank con­tended in a fil­ing last week in Los An­ge­les County Su­pe­rior Court.

“The city’s claims are barred,” the bank said in the court doc­u­ment, deny­ing al­le­ga­tions against it.

Wells Fargo said the Of­fice of the Comptroller of the Cur­rency, which is the Trea­sury Depart­ment agency that reg­u­lates na­tional banks, and other fed­eral agen­cies have ju­ris­dic­tion to reg­u­late na­tional banks, “and those agen­cies have en­acted com­pre­hen­sive reg­u­la­tory pol­icy gov­ern­ing na­tional banks.”

The comptroller’s of­fice would not com­ment on whether it would back Wells Fargo’s at­tempt to have L.A.’s con­sumer-pro­tec­tion law­suit tossed out.

The city’s law­suit, filed last month, al­leged that the bank’s sales quo­tas are so rigid that em­ploy­ees, des­per­ate to meet them, have opened unau­tho­rized ac­counts and pro­vided other un­wanted ser­vices for cus­tomers, stick­ing them with bo­gus fees and dam­ag­ing their credit.

Los An­ge­les City Atty. Mike Feuer dis­puted the claim that the city can’t bring suit. “Of course we have the right to sue Wells Fargo for its al­leged mis­con­duct,” he said.

Wells Fargo also filed a mo­tion in U.S. Dis­trict Court in Los An­ge­les seek­ing to have the law­suit heard in the fed­eral venue.

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