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CFPB uncovers Wells Fargo scheme, scores major win for consumers

One of the nation's largest banks allegedly launched a massive scheme to rip off customers. The Consumer Financial Protection Bureau noticed.
U.S. Senator Warren talks with U.S. Consumer Financial Protection Bureau Director Cordray after he testified about Wall Street reform before a Senate Banking Committee hearing on Capitol Hill in Washington
U.S. Senator Elizabeth Warren (D-MA) (L) talks with U.S. Consumer Financial Protection Bureau Director Richard Cordray (R) after he testified about Wall Street reform before a Senate Banking Committee hearing on Capitol Hill in Washington September 9, 2014.
Even those who've come to expect misconduct among banks were probably surprised by the scale of this Wells Fargo scheme. NBC News reported the other day:

California and federal regulators fined Wells Fargo a combined $185 million on Thursday, alleging the bank's employees illegally opened millions of unauthorized accounts for their customers in order to meet aggressive sales goals. A staggering 5,300 employees at Wells Fargo were fired in connection with this behavior, according to the Los Angeles City Attorney's office. The San Francisco-based bank will pay $100 million to the Consumer Financial Protection Bureau, a federal agency created five years ago; $35 million to the Office of the Comptroller of the Currency, and $50 million to the City and County of Los Angeles. It will also pay restitution to affected customers.

The Washington Post added that, starting in 2011, Wells Fargo employees allegedly chased "compensation incentives" by enrolling customers in banking services without their permission. According to government regulators, the practices included the creation of phony email addresses and fake personal identification numbers.
Soon after, according to the allegations, customers were asked to pay fees -- totaling millions of dollars -- for accounts and services they neither sought nor authorized.
Wells Fargo had previously said the problem was not widespread. According to the CFPB's investigation, however, we're talking about the creation of 1.5 million unauthorized accounts.
As far as the dollar amounts are concerned, this is the biggest victory ever for the Consumer Financial Protection Bureau, which said in a statement, "This widespread practice gave the employees credit for opening the new accounts, allowing them to earn additional compensation and to meet the bank's sales goals. Consumers, in turn, were sometimes harmed because the bank charged them for insufficient funds or overdraft fees because the money was not in their original accounts."
The Post's report added that CFPB Director Richard Cordray blamed Wells Fargo's corporate culture for allowing the "reckless, unsafe or unsound practices."
In this specific case, clearly Wells Fargo has some work to do in the wake of the controversy. But let's also not brush past what this tells us about the federal bureau itself.
President Obama, Elizabeth Warren, and congressional Democrats created the CFPB for cases just like this one. It's not the only recent success story for the agency, which has undertaken related efforts since getting to work in 2011.
The question is whether the Consumer Financial Protection Bureau will be able to continue. Congressional Republicans and banking-industry lobbyists have made no secret of their plans to destroy the agency at their earliest possible opportunity, and Donald Trump has vowed to "dismantle" the law that led to the CFPB's creation.
The bureau's victory last week was a breakthrough, but if there's a Republican White House and Republican Congress next year, successes like these may soon be a thing of the past.