If Wells Fargo truly considers the resignation of CEO John Stumpf to be a first step towards regaining the trust of America’s entrepreneurs, then there are countless more steps they must take to correct the damage their employees did to millions of Americans by creating fraudulent accounts in their names.
As chairman of the House Small Business Committee, I have no higher priority than making sure that America’s 28 million small businesses are treated fairly and respectfully and have every opportunity to succeed.
Forty-eight percent of all employees in the private sector are employed by a small business, according to the Small Business Administration. In fact, 99.7 percent of all U.S. businesses with employees are small businesses, according to the Census Bureau. They are the keystone of our economy.
When small businesses succeed, the American economy succeeds and America succeeds.
This success is threatened by the egregious actions of the Wells Fargo employees who set up accounts for their customers without their permission — many of these customers use their personal accounts for their small businesses.
“Accountability begins and ends with transparency. This is why I have formally requested complete and detailed answers from both Wells Fargo and the SBA to specific questions on how this scandal has affected small businesses.”
The harmful ripple effects of this deception cannot be overstated. It affected not just small business owners but also their employees, customers, vendors and the communities they serve. Imagine the shock and anguish of a mom-and-pop store owner who banked with Wells Fargo when they discovered they had been penalized and their credit diminished for an account they never opened.
When Americans deposit their hard-earned paychecks into their bank, they deserve nothing less than the peace of mind of knowing that their deposits will not be fraudulently manipulated solely for the financial gain of the bank or its employees. By allowing these actions to go on, Wells Fargo failed its customers.
Congressional committees like ours have an oversight responsibility to see that the customers who were victimized are made whole and the Wells Fargo employees who approved and executed this dastardly scheme are held fully accountable.
Moreover, we need to know to what extent federal agencies like the Small Business Administration (SBA) were aware of this scam, which appears to have preyed on vulnerable Americans including small business owners.
Wells Fargo is the single largest participant in SBA’s 7(a) Guarantee Loan Program, including the SBA Express Program, which enables many small businesses to access the capital they need to start and grow their businesses. Additionally, the company provides lending as a part of SBA’s Certified Development Company/504 Loan Program, and even serves as the Central Servicing Agent for the SBA 504 Loan Program. As a partner with SBA in these programs, Wells Fargo has the ability to help small business owners access needed capital to start and grow their businesses. This cannot happen, however, if customers are not able to trust their bank to properly manage their accounts.
Accountability begins and ends with transparency. This is why I have formally requested complete and detailed answers from both Wells Fargo and the SBA to specific questions on how this scandal has affected small businesses.
To be clear, Mr. Stumpf’s resignation will have no bearing on the urgency of our committee’s request or our oversight of this very serious matter.
Since becoming Small Business Committee chairman last year, I have made access to capital one of our top priorities so that small businesses can have the resources they need to get off the ground and stay off the ground. Part of this goal is ensuring that the SBA programs are properly administered and protected against fraudulent activity, and we are eager to work with SBA to this end.
As we await responses from Wells Fargo and the SBA, I can assure small business owners that this matter will have our committee’s full attention and commitment.
Commentary by Congressman Steve Chabot, who represents Ohio’s First Congressional District and is chairman of the U.S. House Committee on Small Business. He is also a senior member of the Committee on the Judiciary and the Committee on Foreign Affairs. Follow the committee on [email protected]