Congressman Higgins Calls on HUD to Debar Wells Fargo from Federal Home Loan Business
In the toughest action to date, Congressman Brian Higgins (NY-26), a member of the House Ways and Means Committee, is calling for Wells Fargo to be excluded from participation in the federal mortgage guarantee program following a disturbing, recurring pattern of consumer fraud. Higgins made the request in a letter to the Federal Housing Administration.
Higgins said, “Wells Fargo has demonstrated a corporate culture of corruption perpetrated again and again on their own customers and clients. The federal government must not be in the business of supporting financial institutions know to perpetuate predatory behavior.”
Most recently Wells Fargo was accused of charging mortgage customers unjustified fees to extend the time allowance for locked in interest rates, even when the bank itself was responsible for the delays. Investigators have also discovered that the bank enrolled customers in online bill pay and charged related fees without permission. Furthermore, the company made home loan modifications to those in bankruptcy that would end up costing customers much more over the long run.
In September 2016 the public learned the financial powerhouse was guilty of secretly opening over 2.1 million fake credit card and bank accounts in customer names as employees scrambled to meet sales quotas. In recent days, an independent analysis of over 165 million Wells Fargo bank accounts opened between 2009 and 2016 found that number to be much higher – closer to 3.5 million unauthorized accounts.
Unnecessary Auto Insurance
In July it was revealed that at least 570,000 customers with auto loans through Wells Fargo between 2012 and 2017 were charged for Wells Fargo auto insurance despite already having insurance elsewhere. As a result, up to 25,000 who were wrongly charged defaulted on loans and had their automobiles repossessed.
Higgins, in his letter, points out that the various compliance breaches and customer deception practices violate federal standards and merit debarment.