Federal regulators fined Wells Fargo $1 billion Friday for abuses tied to its auto-lending and mortgage businesses.
The $1 billion fine is 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 fine against Wells Fargo had been expected. San Francisco-based 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.
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.
While banks have benefited from looser regulations and lower taxes under President Donald Trump, Wells Fargo has been called out specifically by 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!” Trump wrote on Twitter back in December.
Source: Star Tribune
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