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Warren Pressures Colleges to Drop Wells Fargo

January 21, 2019
 
 

In a letter sent to a group of college presidents last week, Senator Elizabeth Warren, a Massachusetts Democrat, suggested they re-evaluate their relationships with Wells Fargo, which charges higher average fees to users of consumer-sponsored credit cards than any other company.

The letter from Warren, who is exploring a run for president, was the clearest pressure yet from a member of Congress for colleges to end their deals with the bank. Others, including Senator Dick Durbin, an Illinois Democrat, have previously questioned fees the bank charged holders of campus debit cards.

Warren has frequently offered sharp criticism of the bank. She blasted former president and CEO John Stumpf over a fake accounts scandal and demanded his resignation in 2016; he left the company the next month. The letter last week was prompted by a Consumer Financial Protection Bureau report that found average fees of the bank were three times higher than those charged by other campus debit card providers.

"Wells Fargo has a history of aggressively and sometimes illegally squeezing its customers to boost its profits, and this report illustrates that the bank is deploying similar tactics on America's college campuses to target vulnerable students," Warren said in a statement.

Some observers said the findings in the CFPB report showed that 2015 cash management rules issued by the Education Department had an overall positive impact for students. But Wells Fargo stood out for its higher-than-average fees. Warren also sent a letter to Timothy Sloan, the bank’s CEO and president, last week seeking answers to questions about the fees.

The company told Bloomberg that it is continually looking to improve how it serves customers. “Before and since the CFPB’s review on this topic, we have been pursuing customer-friendly actions that support students,” a spokesman said.

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