A city of Los Angeles lawsuit accusing Wells Fargo & Co. of opening bank accounts without customers' permission in order to reach sales quotas should be heard in federal court, according to the bank.

Wells Fargo wants the city's consumer protection lawsuit against the bank tossed, arguing federal law prevents the city from suing on behalf of Californians stuck with unwanted accounts and bogus fees.

The bank contends, in a court filing last week, that National Bank Act laws dating to 1863 and 1864 mean banks such as Wells Fargo are only accountable to federal regulators thus the “city’s claims are barred,” according to a court document.

The lawsuit alleged that the bank’s sales quotas are so strict that employees have opened unauthorized accounts and provided other unwanted services for customers, sticking them with bogus fees and damaging their credit. The lawsuit claims that some employees raided client accounts for money to open more accounts.

The bank states that the Office of the Comptroller of the Currency and other federal agencies have jurisdiction to regulate national banks and that those agencies have enacted comprehensive regulations. The OCC would not comment on whether it will support Wells Fargo’s attempt to have the lawsuit thrown out. The lawsuit seeks civil penalties against the bank and restitution for the alleged victims. If Wells Fargo is found to have violated California's unfair competition laws, the bank could be fined up to $2,500 for each violation plus restitution to customers. The lawsuit doesn't clarify how many customers have allegedly been affected by these practices. 

Los Angeles City Attorney Michael N. Feuer has disputed claims that the city is prohibited from suing. Feuer launched an investigation after a December 2013 Los Angeles Times article described how Wells Fargo staffers, fearing wrath from managers, pleaded with family members to open phony accounts or opened accounts that they knew customers didn't want, forged signatures and falsified phone numbers so irate customers couldn't be contacted for satisfaction surveys.
The lawsuit points to a brochure encouraging employees to make sure customers on average have eight open accounts with Wells Fargo as part of its "Going for gr-eight" campaign.  

 

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