Wells Fargo could face $1B in fines

Penalty could help resolve investigations into bank’s behavior in auto, mortgage markets.

WASHINGTON — Wells Fargo said Friday it faces a potential $1 billion in fines to resolve government investigations into the megabank’s behavior in the auto and mortgage markets.

The bank has acknowledged it charged thousands of customers for auto insurance they didn’t need, driving some to default on their loans and lose their cars through repossession. The bank has also said it will refund customers who were charged improper fees to lock in an interest rate for a Wells Fargo mortgage.

Both matters have been under investigation for months by two federal regulators, the Consumer Financial Protection Bureau and the Office of the Comptroller of the Currency. Those regulators are offering to resolve the matter for a combined $1 billion, the bank said. Such a large civil penalty would just be the latest hit to Wells Fargo’s effort to rebuild its image after more than a year of scandal.

“I’m confident that our outstanding team will continue to transform Wells Fargo into a better, stronger company,” Tim Sloan, the bank’s chief executive, said in a statement, “However, we recognize that it will take time to put all of our challenges behind us.”

San Francisco-based Wells Fargo has been struggling to rebuild its reputation since acknowledging in 2016 it had opened millions of sham accounts customers didn’t want. Its longtime chief executive resigned, and Wells paid millions of dollars in fines and overhauled its board of directors. Last month, the Federal Reserve levied an unprecedented penalty against the bank, blocking its ability to expand.