Wells Fargo bank to be fined $1B
Penalty from regulatory, watchdog agencies would be largest ever imposed on a lender
NEW YORK — Federal regulators plan to fine Wells Fargo as much as $1 billion as early as Friday for abuses tied to its autolending and mortgage businesses, The New York Times and other news outlets reported, citing unnamed sources.
The $1 billion fine would be the largest ever imposed by the Office of the Comptroller of the Currency, the bank’s main national regulator, and the Consumer Financial Protection Bureau, the federal watchdog bureau set up after the Great Recession.
The toughest action by the Trump administration against a major bank, it also escalates problems at Wells Fargo, which has been under intense federal scrutiny since admitting in 2016 that it had opened millions of sham accounts customers didn’t want.
The fine against Wells Fargo had been expected. San Franciscobased Wells Fargo said last week that it was negotiating with federal regulators to pay as much as $1 billion in fines to settle charges.
A CFPB spokesman declined to comment, as well as a spokesman for the Comptroller’s Office. A spokeswoman for Wells Fargo
also declined to comment.
The problems with Wells Fargo this time are not tied directly to its well-known sales-practices scandal, where the bank admitted its employees opened as many as 3.5 million bank and credit card accounts without getting customers’ authorization. But they do involve significant parts of the bank’s businesses: auto lending and mortgages.
Last summer, Wells Fargo admitted that hundreds of thousands of its auto-loan customers had been sold auto insurance they did not want or need. In thousands of cases, customers who could not afford the combined auto-loan and extra insurance payment fell behind on payments and had their cars repossessed.
In a separate case, Wells Fargo admitted that thousands of customers were charged unnecessary fees in order to lock in their interest rates on their home mortgages. Wells Fargo is the nation’s largest mortgage lender.
This would be the first fine against a bank by the Trump administration since Mick Mulvaney, acting director of the CFPB, took over the bureau in late-November. Democrats have criticized Mr. Mulvaney, who is also director of the Office of Management and Budget, for appearing to abandon the agency’s job of punishing financial institutions and instead focusing on rolling back some of the agency’s most aggressive regulations.
Big banks such as Wells Fargo have looked forward to a resurgence during the Trump administration. President Donald Trump has appointed businessfriendly regulators and has supported legislation in Congress to roll back rules that the industry has complained went too far.
But while banks have benefited from looser regulations and lower taxes under Mr. Trump, Wells Fargo has been called out specifically by Mr. Trump as a bank that needs to be punished for its bad behavior.
“Fines and penalties against Wells Fargo Bank for their bad acts against their customers and others will not be dropped, as has incorrectly been reported, but will be pursued and, if anything, substantially increased. I will cut Regs but make penalties severe when caught cheating!” Mr. Trump wrote on Twitter back in December.
The expected $1 billion fine is large, but it is hardly crippling for Wells Fargo, which has more than $1 trillion in assets.
Last week the bank reported its quarterly profits had surged to $5.9 billion, in part because of the corporate tax cut passed by Congress last year.