The dust has yet to settle from Wells Fargo's admission that thousands of its employees opened bogus checking and credit card accounts in order to hit sales goals.
You might say it is heading into a dust storm.
Various media outlets are citing anonymous sources which say that FBI and federal prosecutors have begun an investigation into the matter, which burst into public view this week with the announcement that Wells Fargo was paying $185 million in fines to federal and Los Angeles regulators.
The bank said it had fired 5,300 employees who allegedly opened hundreds of thousands of deposit and credit card accounts for consumers without those consumers' knowledge or permission, presumably to meet strict sales goals.
Neither the FBI nor the bank would comment on reports of a potential criminal investigation, but that's normal procedure. It would be highly unusual if either party did.
Congress getting into the act
However, the Senate Banking Committee has scheduled a public hearing for next week in which it will press Wells Fargo CEO John Stumpf to explain what happened and how. The committee will also hear from officials of the Office of the Comptroller of the Currency, Consumer Financial Protection Bureau (CFPB), and Los Angeles City Attorney's Office, the agencies that uncovered the activity.
In a bid to limit the fallout from the revelations, Stumph went on CNBC's “Mad Money” this week and apologized to consumers who had accounts opened without their permission. He told host Jim Cramer he takes “personal responsibility” for the scandal, but also said he would not resign because of it.
There has been some speculation that Stumph might be forced out over the revelations, but Joe Morford, an analyst with RBC Capital Markets, told the San Francisco Examiner he believes Stumph will survive.
"I'm a little surprised that the issue has become as big as it has,” Morford told the newspaper. “But this is the kind of story that does well with politicians and the press — not to diminish what happened."
Another takeaway from all of this, at least for allies of the CFPB, is the role of the watchdog in exposing Wells Fargo's activity. Treasury Secretary Jack Lew says, if not for the often-criticized agency, along with other regulators, the scandal would not have come to light.
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