Today U.S. Senator Chris Van Hollen raised the issue of forced arbitration – which denies consumers the right to sue a company – with Tim Sloan, the CEO of Wells Fargo. A transcript of their exchange is below. Senator Van Hollen also talked about a Maryland resident who was impacted by the bank’s auto insurance scandal. To watch the full video of the Senator’s questions, click here.
SENATOR CHRIS VAN HOLLEN (D-MD): I was listening to your response to Senator Tester about the issue of forced arbitration. Simple question: who knows best about what’s in a customer’s interest – Wells Fargo or your customer?
TIM SLOAN, CEO, WELLS FARGO: I think it frequently is the customer – and that’s why it’s very important, from my perspective, to get it right so that we don’t get to the point…
VAN HOLLEN: But, if your customer knows best, why do you deny them the ability to go to court? Why do you require your customers, if they know best, to go to mandatory arbitration?
SLOAN: Senator, we don’t do that for all of our products and services…
VAN HOLLEN: But why do you do it for some of them if the customer knows best?
SLOAN: Well again, I think many…
VAN HOLLEN: It’s a simple question – if your customer knows best, why do you deny them the opportunity to go to court? Why do you require arbitration?
SLOAN: Because Senator, most of the independent studies, including the one that was done by the CFPB two years ago, indicate that it’s better for the customer.
VAN HOLLEN: But the customer brings the case, right? So, if the customer decides it’s in his or her best interest, forget about studies. We also know what the Consumer Financial Protection Bureau recommended – they recommended that we get rid of forced arbitration. You said to Senator Tester that you were not applying forced arbitration with respect to the fake accounts. Remember that answer?
SLOAN: Yes I did.
VAN HOLLEN: There’s an article here – Monday, September 18, 2017, just a short time ago. In a case in Utah, Wells Fargo lawyers have actually taken the position that the forced arbitration does apply to those fake accounts. Are you aware of that case?
SLOAN: I’m not familiar with that case, Senator -- I apologize.
VAN HOLLEN: Well let me read to you from a Reuters excerpt, and they reported this on September 18, 2017. It says, “In a motion on Monday, lawyers for Wells Fargo said consumers signed agreements to arbitrate disputes when they first opened accounts at the bank, and those agreements also cover other accounts allegedly opened without their consent.” That directly contradicts your testimony to Senator Tester, doesn’t it?
SLOAN: Senator I’ll have – I will look into that matter.
VAN HOLLEN: If that is true, it directly contradicts your testimony to this Committee, doesn’t it?
SLOAN: Senator, I will look into that matter.
VAN HOLLEN: I’m not asking you to look into it. I’m asking you to say, if that’s true, doesn’t it contradict your testimony today?
SLOAN: Senator, I’m not familiar with the facts of the situation so I can’t answer that question, but I’d be happy to look into it and respond to you.
VAN HOLLEN: Well, if it’s true, it violates, it’s in contradiction – I don’t know if you were sworn in today or not – but it violates your other testimony.