Wells Fargo whacked with $1bn fine for lending violations
Wells Fargo has been hit with a $1 billion fine by the Consumer Financial Protection Bureau (CFPB) for its auto-loan administration and mortgage practices.
In a coordinated action with the Office of the Comptroller of the Currency (OCC), the bureau found that Wells Fargo violated the Consumer Financial Protection Act (CFPA) in the way it administered a mandatory insurance programme related to its auto loans.
The bureau also found that Wells Fargo violated the CFPA in how it charged certain borrowers for mortgage interest rate-lock extensions.
The CFPB says under the terms of the consent orders, Wells Fargo will remediate harmed consumers and undertake certain activities related to its risk management and compliance management.
The bureau assessed a $1 billion penalty against the bank and credited the $500 million penalty collected by the OCC toward the satisfaction of its fine.
CFPB’s acting director Mick Mulvaney says: “As to the terms of the settlement: we have said all along that we will enforce the law. That is what we did here.”
The bank has responded.
Timothy J. Sloan, president and CEO of Wells Fargo, says: “While we have more work to do, these orders affirm that we share the same priorities with our regulators and that we are committed to working with them as we deliver our commitments with focus, accountability, and transparency.”
Well, there is more bad news to share.
Last year, we reported on the scandal of employees at Wells Fargo creating 2.1 million fake bank accounts and credit card numbers to boost sales figures.
After an expanded third-party review of retail banking accounts dating back to the beginning of 2009, Wells Fargo revealed that the number was in fact 3.5 million accounts.
As reported in 2016, the bank was fined $185 million, including a record $100 million by the CFPB.
Wells Fargo also fired at least 5,300 employees who were involved in the shady deals.
In March 2017, Wells Fargo announced it would pay $110 million to settle a class action lawsuit brought by US consumers over the scandal.
In other news, and in January this year, Wells Fargo said it plans to close 800 more bank branches by 2020.