Guy Who Fought Wells Fargo Is Angry About Attack On CFPB
CNN/Stylemagazine.com Newswire | 5/15/2017, 1:45 p.m.
NEW YORK (CNNMoney) -- Mike Feuer's 2015 lawsuit against Wells Fargo was the opening salvo in what would become the darkest scandal in the bank's 165-year history.
But Los Angeles City Attorney Feuer would be the first to say that teaming up with the nation's Consumer Financial Protection Bureau was what widened the scope of the investigation into the bank's widespread sordid practices. That cooperation created the heft and breadth that led Wells Fargo to admit to firing 5,300 employees and creating 2 million fake accounts nationwide. It also got Wells Fargo to pay $185 million in penalties and $5 million in refunds to wronged customers.
Feuer is now shocked to see a push to defang or even abolish the CFPB by Republicans in Congress so soon after the Wells Fargo scandal that shook the country. Not only did the CFPB play a key role in exposing Wells Fargo's tactics, but the scandal outraged lawmakers on both sides of the aisle.
"I'm appalled at the spectacle of the House attempting to dismantle or at least severely diminish the CFPB," Feuer told CNNMoney.
The CFPB is a federal agency that came into being after the financial crisis to help protect consumers from unscrupulous practices of financial institutions. The consumer watchdog was the brainchild of Senator Elizabeth Warren.
Feuer said one of the key lessons of the Wells Fargo scandal is the need to have a "very viable and muscular CFPB."
Yet Republicans in the House of Representatives recently advanced the Financial Choice Act, a bill that would give the president the power to fire the head of the CFPB, and also Congress the ability to de-fund the agency entirely.
Supporters of the bill argue the CFPB has become too powerful and its tough enforcement is actually hurting consumers by making it tougher to get a loan. President Trump has vowed to "do a big number" on the 2010 Dodd-Frank law that created the CFPB. Trump has cited the inability of his friends with "nice businesses" to get a loan.
Leading Republicans have also called on President Trump to fire CFPB Director Richard Cordray, who led the bureau during the entire time it investigated Wells Fargo.
Feuer offered a challenge to members of Congress: "Are you in favor of protecting consumers or are you going to be protecting big banks?"
Critics of the CFPB have argued the Wells Fargo scandal shows the ineffectiveness of the agency since the problems were first brought to light by a newspaper article and not by regulators. They note how the investigation originated with a groundbreaking LA Times article, which then sparked the May 2015 investigation by Feuer's office.
"It's true we brought the case in the first place, but our collaboration with the CFPB enabled there to be nationwide relief for Wells customers," Feuer said.
In the wake of the controversy, Wells Fargo changed many of of its practices and its CEO stepped down. The bank named a new CEO Tim Sloan, ditched unrealistic sales goals that prompted the behavior and hired a law firm to conduct an in-depth investigation among other moves.
"We have an unwavering commitment to fix everything that went wrong," Sloan said last week during a meeting with investors.
Feuer said he's "not in a position" to say whether Americans are now safe from the predatory tactics Wells Fargo has been accused of.
However, Feuer acknowledged there's "no question" Wells Fargo's numerous changes represent "significant movement" towards making its business practices safer for consumers.
"I can't say whether that movement was sufficient," he said.
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