WASHINGTON, DC — U.S. Senators Jack Reed (D-RI) and Sheldon Whitehouse (D-RI) joined Senator Sherrod Brown (D-OH) and 16 Senators this week in introducing legislation that would give victims of Wells Fargo’s fraudulent account scheme their day in court. 

From at least 2011 to 2015, Wells Fargo opened millions of fraudulent accounts – two million bank accounts and 565,000 credit card accounts – in its customers’ names.  Wells Fargo is now preventing victims from suing them by using forced arbitration clauses tucked away in the fine print of contracts that customers signed when opening legitimate accounts.

Wells Fargo recently fired a group of senior managers amid the bank’s ongoing internal investigation of the scandal, but the bank has refused to stop using forced arbitration clauses against defrauded customers.

The Justice for Victims of Fraud Act will work hand-in-hand with a new oversight rule that the Consumer Financial Protection Bureau (CFPB) put out in May to strengthen protections for consumers.  Whereas the CFPB proposal would apply only to contracts signed after the rule is final, this bill would allow victims of Wells Fargo’s fraud to seek their day in court even if they signed contracts that included arbitration for their legitimate accounts in the past.

“Wells Fargo must be held accountable and their customers deserve to have their day in court,” said Senator Reed, a senior member of the Senate Banking, Housing, and Urban Affairs Committee.  “There is no reason Wells Fargo should be allowed to prevent victims from pursuing legal action for their unauthorized accounts due to arbitration agreements they were forced to sign when setting up a legitimate account.”

“Wells Fargo betrayed its customers’ trust by opening phony accounts in their names,” said Senator Whitehouse.  “This bill allows victims of this corporate fraud their day in open court, with their case heard by a jury of citizens, not professional arbiters.”

In addition to Brown, Reed, and Whitehouse, the bill is cosponsored by U.S. Senators Patrick Leahy (D-VT), Patty Murray (D-WA), Ron Wyden (D-OR), Richard Durbin (D-IL), Robert Menendez (D-NJ), Bernie Sanders (I-VT), Robert Casey (D-PA), Mark Warner (D-VA), Jeff Merkley (D-OR), Al Franken (D-MN), Richard Blumenthal (D-CT), Brian Schatz (D-HI), Mazie Hirono (D-HI), Elizabeth Warren (D-MA), Heidi Heitkamp (D-ND), and Chris Van Hollen (D-MD).

The bill has been endorsed by Americans for Financial Reform, Public Citizen, NAACP, American Association for Justice, Allied Progress, Center for Responsible Lending, Economic Policy Institute Policy Center, California Reinvestment Coalition, Consumers for Auto Reliability and Safety, Consumer Federation of America, National Consumers League, Public Justice, Franciscan Action Network, Media Voices for Children, Woodstock Institute, Tennessee Citizen Action, National Consumer Law Center (on behalf of its low income clients), National Association of Consumer Advocates, The Impact Fund, Consumer Watchdog, Alliance for Justice, Workplace Fairness, Homeowners Against Deficient Dwellings, Consumer Action, Consumers Union, and Communications Workers of America (CWA).

After the fraudulent account scheme was uncovered last September, Reed questioned Wells Fargo CEO John Stumpf at a Banking, Housing, and Urban Affairs Committee hearing on “An Examination of Wells Fargo’s Unauthorized Accounts and the Regulatory Response.”