Sec. 2. Findings

301 words·~1 min read·/bill/115/hr/1414/ih/section-2

A research copy — for the controlling text, always check the official state or federal source. Not legal advice.

The Congress finds the following: The Bureau of Consumer Financial Protection found that Wells Fargo management implemented sales incentives, including an incentive-compensation program, in part to increase the number of banking products and services that its employees sold to its customers. The Bureau of Consumer Financial Protection found that Wells Fargo employees engaged in improper sales practices to satisfy sales goals under Wells Fargo’s incentive compensation program, including opening as many as 1,534,280 checking accounts and 565,443 credit card accounts using consumers’ information without their knowledge or consent between May 2011 and July 2015.

Wells Fargo successfully claimed in Jabbari v. Wells Fargo that customers had signed away their rights to hold Wells Fargo accountable in court for claims of fraud because those customers were bound to a forced arbitration clause for their legitimate accounts. After Wells Fargo publicly entered a settlement with Federal regulators for the opening of thousands of unauthorized customer accounts, Wells Fargo claimed in Mitchell et al. v. Wells Fargo et al. that customers’ fraud claims must continue to be forced into arbitration.

Several courts have determined that despite claims of fraud over unauthorized accounts opened without customer knowledge or consent, those customers are still bound by contracts forcing those claims into arbitration based on the courts’ interpretation of the Federal Arbitration Act. The Federal Arbitration Act (now codified as chapter 1 of title 9, United States Code) was intended to apply to disputes between commercial entities of generally similar sophistication and bargaining power, but a series of decisions by the Supreme Court of the United States have interpreted the Federal Arbitration Act as applicable to claims of fraud.

Consumers have no meaningful choice whether to submit their claims to arbitration and are typically unaware that they have given up their rights to file claims in court.