Wells Fargo facing suits, mad lawmakers
NEW YORK» The heat on Wells Fargo over its auto lending business has intensified, with customers filing at least three lawsuits, politicians calling for hearings and a bank regulator issuing a subpoena for records.
Wells Fargo, still trying to recover from a fake accounts scandal, said last week that roughly 570,000 customers were signed up for and billed for car insurance that they didn’t need or necessarily know about. Many couldn’t afford the extra costs and fell behind in their payments. In about 20,000 cases, cars were repossessed.
The bank has agreed to pay $80 million in refunds and account adjustments to customers, with checks starting to go out this month.
But on Wednesday, the New York Department of Financial Services sent a subpoena to Wells Fargo.
It wants to see copies of loan contracts with borrowers, agreements with its dealer network, and any outside vendors who may have played a role.
That follows two customer lawsuits filed in California and one in New York.
The bank, along with being one of the nation’s largest retail banking chains, is also one of the largest auto loan companies with a network of 14,000 dealerships.
Politicians are also angry with Wells Fargo, with Democrats in the House and the Senate calling for a Congressional investigation.