Magazine article American Banker

Clinton Makes Wells Fargo Scandal a Campaign Issue

Magazine article American Banker

Clinton Makes Wells Fargo Scandal a Campaign Issue

Article excerpt

Byline: Kate Berry

Democratic presidential candidate Hillary Clinton vowed to crack down on corporate abuse at a campaign rally Monday, specifically taking aim at Wells Fargo for allowing ex-employees to open roughly 2 million phony accounts.

The former secretary of state sharply criticized the San Francisco bank, linking it to other firms accused of greedy behavior, such as drugmaker Mylan, which has been blasted for jacking up the price on Epi-pens.

In doing so, she effectively elevated the Wells scandal to a presidential campaign issue, using it to call for tougher standards on Wall Street, defend the Consumer Financial Protection Bureau and propose restrictions on forced arbitration clauses, which she said are stopping consumers from suing Wells.

"We are not going to let companies like Wells Fargo escape responsibility," Clinton said at a campaign rally in Toledo, Ohio.

While Clinton has previously criticized Wells in a statement released shortly after the scandal broke, her comments Monday were far more expansive.

"Consider the recent example we've seen of egregious corporate behavior. Look at Wells Fargo. It's really shocking, isn't it?" Clinton said. "One of the biggest banks bullying thousands of employees into committing fraud against unsuspecting customers, secretly opening up millions of accounts for people without their consent - even their knowledge - misusing personal information and then sticking customers with hidden fees.

"It is outrageous that eight years after a cowboy culture on Wall Street wrecked our economy we are still seeing bankers playing fast and loose with the law," Clinton said.

Clinton said the case demonstrated the need for more restrictions on forced arbitration clauses. If elected president, she wants Congress to give the Federal Trade Commission, the Federal Communications Commission, and the Labor Department broad and clear authority to rein in the uses of such clauses, arguing they are inherently unfair.

"The Wells Fargo scandal shed light on another threat to consumers that we have to address," Clinton said. "When the scam's victims -- you and me -- tried to sue, they were shocked to learn there was a provision in the fine print of the contracts that kept them from going to court to sue the bank for how they were being treated. Instead, they were forced into a closed-door arbitration process that kept them from a court of law."

The CFPB has already issued a proposal that would greatly restrict the use of arbitration clauses in financial contracts, but Clinton noted she wanted to target their use in all consumer dealings, not just with financial institutions.

Arbitration clauses have emerged as one of the many flashpoints during the Wells matter. …

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