McGinty: $100 million fine against Wells Fargo shows value of consumer agency

By Katie McGinty

Last week, Wells Fargo made history for all the wrong reasons. The bank, one of the largest in Pennsylvania, was hit with the biggest penalty ever - $100 million - issued by the U.S. Consumer Financial Protection Bureau (CFPB), which reported that Wells Fargo had created more than two million unauthorized bank and credit card accounts in its customers' names.

It turns out that, for years, Wells Fargo employees have been boosting their sales numbers by signing customers up for bank accounts they didn't want or ask for, according to regulators. To make matters worse, CFPB reports that customers had no idea about the accounts until they discovered that they had been charged or had their credit downgraded through no fault of their own.

The silver lining, if there is one, is that this scandal made clearer than ever the value of watchdogs like the CFPB. The agency levels the playing field so that honest banks and financial actors get ahead while those who cut corners are required to clean up their act. Without the CFPB, thousands of Wells Fargo employees might still be cashing in big bonuses from engaging in predatory behavior.

Unfortunately, this scandal is just the latest example of how some bad actors are all too willing to take advantage of working families. Pennsylvanians should feel secure, even optimistic, when they walk into the bank - ready to buy that dream home or expand the business they are so proud of building. Instead, in the case of Wells Fargo, the bank has made its customers insecure - people who had entrusted the bank with their life savings.

So you have to ask, if the CFPB is keeping banks accountable to the clients they serve, and making sure that the rule of law wins the day for consumers and honest banks, why do some in Congress keep trying to defund and defang it?

Since its founding just five years ago, the bureau has already helped more than 22,000 Pennsylvanians - including 1,700 seniors and nearly 1,000 service members - get fair treatment from banks, lenders, and other financial institutions. Ripping people off is wrong and would be beyond irresponsible to walk back the progress we have made by making it harder for the agency to do its job.

Those who don't share my view might argue that it's bad for business to rein in big banks who will do anything to boost their bottom line. I say it's both the right and the smart thing to do. By just allowing the CFPB to do its job, we protect consumers while warding off the kinds of risky behavior that caused the 2008 economic collapse.

Our middle class is the backbone of our economy. Yet in the wake of the 2008 crisis, when thousands of Pennsylvanians lost their jobs and their homes and millions of families across America were crushed, the bottom fell out of the middle class. It's why so many across our commonwealth are still struggling to get back on their feet, and feeling more than ever like the deck is stacked against them.

If we want to invest in thriving businesses and build a resilient economy that works for everyone, the last thing we should be doing is weakening our safeguards against predatory financial practices. In fact, we should be doing just the opposite and enacting stronger protections. It is for exactly this reason that, in the Senate, I would be proud to work with champions like Sen. Elizabeth Warren (D., Mass.) to strengthen the CFPB, and fight off attempts to gut a consumer watchdog that is delivering for the public and honest businesses that play by the rules.

Wells Fargo is an appalling example of a major bank, a trusted household name, taking advantage of its customers for years. We don't yet know the full impact of the scandal, but Wells Fargo is one of the largest banks in our state, and we already know that Pennsylvanians were among those harmed.

In recent years, our middle class has been squeezed nearly to the brink. As Pennsylvania families finally begin to share in our comeback from the 2008 meltdown, we can't afford to turn a blind eye to irresponsible practices.

As the daughter of a Philadelphia police officer, I know how important it is to have a reliable cop on the beat looking out for our communities. The same can be said of our economy, with the CFPB serving as the watchful officer protecting Pennsylvanians from scams and abuse from institutions that should be serving them.

Katie McGinty is a Democratic candidate for U.S. Senate. @KatieMcGintyPA