Wells Fargo Exhibit A in Democrats' case against tax law

Register now

WASHINGTON—Wells Fargo was the biggest beneficiary of a law cutting corporate tax cuts, House Democrats claimed Wednesday.

At a House Financial Services Committee hearing on the six-month anniversary of the tax law, several Democrats attempted to counter Republicans’ praise for the increased investment, wages and bonuses resulting from the bill by tying it to Wells, which has been under fire for a host of scandals, including one in which thousands of employees opened up as many as 3.5 million unauthorized accounts.

“The tax scam contains massive giveaways to the nation’s largest banks,” said Rep. Maxine Waters of California, the committee’s ranking Democrat. “An Americans for Tax Fairness analysis finds that as a result of the lowering of the corporate tax rate, the nation’s six largest banks will collectively save an estimated $14 billion in 2018 alone. Another report predicts that Wells Fargo will gain the most from HR 1 of any bank in the country.”

Rep. Stephen Lynch, D-Mass., noted that under the Republican-passed tax bill, major corporations like Wells Fargo would receive permanent cuts, while individuals are only getting temporary breaks.

“Wells Fargo, who robbed their own customers, set up fake accounts, charged them fees without any authorization,” Lynch said. “A billion-dollar fine, but then to the rescue rides the Republican tax bill and makes them the biggest winner. ... And then regular working Americans who got robbed, they get a temporary tax cut.”

On the heels of the Wells Fargo comments by Waters and Lynch, Rep. Gwen Moore, D-Wis., questioned a small-bank executive who spoke on behalf of the Texas Bankers Association on the bonuses bank employees were receiving.

Ford Sasser, president and CEO of the $350 million-asset Rio Bank in McAllen, Tex., said that the bonus his bank gave in January was “purely the result” of the Republican tax bill. However, he added that his bank already gives year-end bonuses regularly, which were unrelated to tax reform.

But committee Chairman Jeb Hensarling, R-Texas, as well as the other Republicans, touted the tax law's benefits to the economy.

“Not only do I see it in the stats, I hear it from my constituents,” Hensarling said. “Just in the last couple of weeks, I heard from Brad in Wills Point, ‘The bank my wife works for has given two raises and increased benefits since the passage of the act.' "

For reprint and licensing requests for this article, click here.