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Senators ask Labor Department to investigate Wells Fargo

A group of senators is calling for the Department of Laborto investigate Wells Fargo &Co. in the wake of the bank's unauthorized account scandal.

Wells Fargo recently agreed to pay $185 million in fines after regulators found thatemployees opened more than 2 million checking and credit card accounts that maynot have been authorized by customers. Now, several senators are questioningwhether the bank violated the Fair Labor Standards Act.

"In addition to this vast consumer fraud, according tothe [Consumer Financial Protection Bureau], the investigation of WellsFargo also uncovered a workplace characterized by stringent sales quotas andaggressive incentives imposed on its employees, and staggering neglect bymanagement of the obvious consequences to consumers of those quotas andincentives," wrote Sens. Elizabeth Warren, D-Mass.; Sherrod Brown, D-Ohio;Jack Reed, D-R.I.; Robert Menendez, D-N.J.; Bernie Sanders, I-Vt.; JeffMerkley, D-Ore.; Kirsten Gillibrand, D-N.Y.; and Mazie Hirono, D-Hawaii, in aSept. 22 letter to Labor Department Secretary Tom Perez and Wage and HourDivision Administrator David Weil.

The senators took issue with comments Wells Fargo CEO JohnStumpf made during a Senate hearing earlier in the week claiming employees had noincentive to break the rules. They called for the Labor Department to launch aninvestigation, including a "comprehensive inquiry" into the bank'sapproach to overtime pay.   

Wells Fargo spokeswoman Jennifer Dunn declined to comment onthe letter.

During a press call to discuss the scandal Sept. 8, federalbank regulators focused on the salesculture at Wells Fargo. The head of the OCC, Thomas Curry, said theenforcementaction "likely could have been prevented" if the bank had strongerrisk management programs that better aligned incentives against employeebehaviors. And CFPB Director Richard Cordray said the entire industry shouldconsider itself "on notice" that his agency will be looking closelyat incentive compensation structures.