Court Says Chao Needs to Pay Millions for Wells Fargo Abuse

Chao’s oversight failures extend from Wells Fargo consumer abuses to FAA’s Boeing disaster

WASHINGTON — A federal judge gave preliminary approval to the proposed $240 million settlement against Wells Fargo representatives yesterday, including Transportation Secretary Elaine Chao. In February, insurers agreed to pay out millions to shareholders who sued Chao and others for shirking their responsibilities while Wells Fargo committed serious consumer abuses. The news follows recent allegations against Chao that under her leadership at Transportation, the culture of the Federal Aviation Administration (FAA) led to failures at aviation giant Boeing.

“Secretary Chao is finally being held accountable for her compliance in Wells Fargo’s crimes but when will there be enough evidence against Chao for Congress to properly investigate her?” said Lizzy Price, spokesperson for Restore Public Trust. “Thousands of Americans were victimized by Wells Fargo under Chao’s inattentive watch. But Chao has demonstrated she runs a loose ship wherever she goes – first at Wells Fargo and now at the Transportation Department. Only now, the stakes are even higher – American lives are at risk. Chao’s lack of oversight of FAA safety regulators proves it. It’s time for Congress to investigate Chao.”

In December, Restore Public Trust urged then-incoming House Financial Services Committee Chair Maxine Waters and the Financial Services Committee to look into Chao’s role during Wells Fargo’s scandals while she served on the Wells Fargo Board of Directors.

Chao served as a board member from 2011 until 2017, a time period marked by constant scandals, before she resigned to become President Trump’s Transportation Secretary. As a Wells Fargo board member, Chao was responsible for overseeing the ethics and fair corporate practices of the mega bank. She sat on the bank’s Corporate Responsibility & Finance and Credit & Finance committees, all while Wells Fargo committed numerous consumer abuses, including improperly repossessing veterans’ cars and wreaking havoc on their credit. She oversaw Wells Fargo’s residential lending practices that led to nearly 400 customers being improperly foreclosed on and losing their homes, all because of a computer error. On Chao’s watch, Wells Fargo charged more than half a million borrowers for insurance they did not want nor need.

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