Reports: Wells Fargo to be fined $1B as early as today

NEW YORK » Federal regulators plan to fine Wells Fargo as much as $1 billion as early as today for abuses tied to its auto-lending and mortgage businesses, The New York Times and other news outlets reported, citing unnamed sources.

The potential $1 billion fine would be 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 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 various 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 to 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 that 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 their payments and had their cars repossessed.

In a separate case, Wells Fargo also 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.