A group of Senate Democrats have asked the U.S. Department of Labor to open an investigation into whether Wells Fargo violated the Fair Labor Standards Act (FLSA).
The letter follows a hearing on Capitol Hill this week that saw bank CEO John Stumpf face blistering questions from senators over a scandal involving allegations from regulators that employees opened accounts without customers' knowledge or permission.
Separately, Stumpf resigned from his position on the Federal Advisory Council effective today, the San Francisco Federal Reserve Bank told ABC News. The council generally meets with the Federal Reserve four times a year to advise it on banking and economic issues.
The FLSA establishes standards for wage, overtime, youth employment and record-keeping for both the private and public sector, according to the DOL's website. Among other stipulations, the FLSA mandates that non-exempt employees receive overtime pay equal to 1.5 times his or her regular rate, if the employee works more than 40 hours per week.
Describing Wells Fargo's opening or attempted opening of the accounts as "fraud," the senators wrote in a letter to Labor Secretary Tom Perez and DOL Administrator David Weil that "the suggestion last week by Chief Executive John Stumpf that '[t]here was no incentive to do bad things' at Wells Fargo -- a company that fired 5,300 employees over five years due to improper selling but made little effort to change its policies -- does not appear to be grounded in reality."
The reason for that, the senators claimed, citing media reports, is that "dozens of former and current Wells Fargo employees have come forward to describe the lengths they went to in order to meet the bank's aggressive sales quotas," and, "When quotas weren't met, employees faced threats of termination; mandated hours of unpaid overtime; harassment; and other forms of retaliation."
DOL spokesman Jason Surbey acknowledged that the agency had received the letter, and said: "While we cannot discuss details of potential law enforcement decision-making, we do take the concerns raised in the letter very seriously."
On Sept. 13, the bank said that it would end its sales goals program effective Jan. 1, 2017.
In response to the senators' request to the DOL, Wells Fargo spokeswoman Jennifer G. Dunn told ABC News today that "our team members are our greatest asset."
"We strive to make every one of them feel valued, rewarded and recognized and we pride ourselves on creating a positive environment for our team members, including market competitive compensation, career-development opportunities, a broad array of benefits, and a strong offering of work-life programs," Dunn added.
Sens. Elizabeth Warren, D-Mass., Sherrod Brown, D-Ohio, Jack Reed, D-R.I., Robert Menendez, D-N.J., Bernie Sanders, I-Vt., Jeff Merkley, D-Ore., Kirsten Gillibrand, D-N.Y., and Mazie Hirono, D-Hawaii, sent the letter two days after many of them grilled Stumpf for nearly three hours in a Senate Banking Committee hearing on Capitol Hill.
Senators Ask Labor Dept. to Investigate Wells Fargo Over Accounts Scandal