Senate and Congressional hearings provide great headlines and terrific soundbites for media coverage. However, often the hearings have little actual impact. Today, insideARM discusses two examples of upcoming hearings.
Well Fargo CEO to Testify Before the Senate Banking Committee
Today Wells Fargo & Co. CEO John Stumpf appears before the Senate Banking Committee to testify about the bank’s $185 million settlement with the Consumer Financial Protection Bureau (CFPB), the Los Angeles City Attorney, and the Office of the Comptroller of the Currency (OCC) for creating accounts for unwitting customers. The CFPB alleged that the activity was caused by Wells Fargo employees secretly opening unauthorized accounts to hit sales targets and receive bonuses. See the insideARM September 9, 2016 story on the settlement.
The settlement has received significant press coverage over the past 11 days including this article published online by Fortune on September 12, 2016. The article indicates that a Wells Fargo senior executive (Carrie Tolstedt) who was in charge of the unit where Wells Fargo employees opened more than 2 million largely unauthorized customer accounts, will leave the bank with an enormous pay day—$124.6 million. Per the article:
“When Tolstedt leaves Wells Fargo later this year, on top of the $1.7 million in salary she has received over the past few years, she will be walking away with $124.6 million in stock, options, and restricted Wells Fargo shares. Some of that hasn’t vested yet.”
You can be certain that members of the Banking Committee will grill Mr. Stumpf on that payout and on bonuses paid to other employees based upon the conduct that led to the settlement. Senators will be clamoring for a “clawback” of those bonuses.
For additional insight on this hearing please see this article, detailing a former regulator’s thoughts on the hearing and its import.
House Subcommittee to Hold Hearing to Discuss TCPA
The U.S. House of Representatives Energy and Commerce Committee’s Subcommittee on Communications and Technology will discuss the Telephone Consumer Protection Act during a hearing at 11 a.m. (EST) on Thursday, Sept. 22. The hearing is entitled: “Modernizing the Telephone Consumer Protection Act.”
Per the Press Release announcing the hearing:
“The subcommittee will examine the impact the Telephone Consumer Protection Act (TCPA) has had on consumers and the legitimate businesses that are trying to contact them. Technology has changed dramatically in the years since its enactment in 1991 and so has the technology for making unwanted calls. As a result, the TCPA is both failing to keep consumers from receiving unwanted robocalls and making it more difficult to legitimately contact people for reasons of health, safety, employment, and education.
“As technology evolves, so too should our laws. The TCPA should be ensuring Americans receive the calls they want without being harassed by calls they don’t. Instead, it’s a prime example of an outdated law that lags behind modern communications technology and consumer preferences,” said Chairman Greg Walden (R-OR). “Next week, we will focus on the impact the law is having on folks and examine ways in which we can modernize this law for 21st century.”
The Majority Memorandum, a witness list, and witness testimony will be available here as they are posted.”
While the ARM industry would love to see the TCPA modernized it is unlikely that any such legislation could pass both the House and Senate in the immediate future. Consumer groups and the FCC have made the term “Robocalls” radioactive. Calls by debt collectors have been lumped into the broader group of “Robocalls”. Consumer rights groups and Trial Lawyers have banded together and will fight to preserve the lucrative consumer litigation under the TCPA. November election results could impact potential legislative activity, but as of this time, significant, pro-business change to the TCPA appears unlikely.
insideARM will monitor both of these hearings and provide additional coverage as appropriate. However, as we noted in our initial paragraph, these two hearings may have little practical impact to the ARM industry.