Wells Fargo Should Be Broken Up, Senator Urges After Huge New Fine

Wells Fargo has been ordered to pay a $3.7 billion fine over 'illegal activity.'

Few lawmakers have gone after banks as hard as Elizabeth Warren (D-Mass.) has gone after Wells Fargo  (WFC) - Get Free Report. Back in 2016, the Democratic senator first called on former chief executive and chairman John Stumpf to resign amid the burgeoning scandal over the bank opening millions of customer accounts without authorization.

Warren later sent a letter to Janet Yellen (who was then head of the Federal Reserve) urging her to remove 12 board members amid the scandal and she has repeatedly lobbied for other lawmakers to join her in holding Wells Fargo accountable.

Most recently, Warren published an October report accusing the bank of "rampant fraud and theft" through the instant payment app Zelle and once again calling for increased pressure on the bank.

"Your customers -- who have in recent years endured dozens of examples of lawbreaking and mistreatment by your bank -- deserve better," Warren wrote in a letter sent to CEO Charles Scharf.

A Big Fine And A Small Victory

On Tuesday, Warren and everyone else pushing Wells Fargo to account scored a victory after the Consumer Financial Protection Bureau ordered the bank to pay $3.7 billion over "widespread mismanagement" spanning multiple years.

As reported by the Associated Press, Wells Fargo has to repay $2 billion to the more than 16 million customers who were affected and pay a $1.7 billion fine to the CFPB. The "illegal activity" described by the CFPB includes everything from incorrectly charging interest and overdraft fees to wrongfully repossessing and foreclosing on the cars and homes of customers.

"Put simply: Wells Fargo is a corporate recidivist that puts one out of three Americans at risk for potential harm," CFPB Director Rohit Chopra told reporters in a call. Wells Fargo had already been ordered to pay $1 billion in 2018 over similar home and auto loan mismanagement accusations.

Immediately after the news broke, Warren took a hit at Wells Fargo in two separate tweets. She called CFPB's move a "historic step" and said "more regulators should follow" the move.

"Wells Fargo has repeatedly broken the law and ripped off its customers," Warren wrote in a Dec. 20 tweet that tagged the banking giant. "I've said it once, and I'll say it again: We need to break up Wells Fargo."

Nearly Six Years Of Going Head To Head

Wells Fargo agreed to pay the CFPB fine and told news outlets that it was moving forward to improve its practices going forward.

"This far-reaching agreement is an important milestone in our work to transform the operating practices at Wells Fargo and to put these issues behind us," Scharf said in a statement provided to TheStreet. "We have made significant progress over the last three years and are a different company today."

But it's unlikely that Warren will take Wells Fargo at its word and stop pushing for accountability over multiple areas of its lending and management processes.

In October, a spokesperson for the bank called Warren's report on Zelle Fraud "misleading and inaccurate." The lawmaker, in turn, clapped back with a follow-up letter saying such a response was dismissive and disrespectful of customers who "have in recent years endured dozens of examples of lawbreaking and mistreatment by your bank" and, according to Warren, "deserve better."

UPDATE: This article has been updated to include a statement from Wells Fargo.