Documents: Feds Hit Wells Fargo for $1B Penalty for Consumer Abuses
The $1 billion penalty imposed by the Consumer Financial Protection Bureau marks the largest in the agency's history.
April 20, 2018 at 10:00 AM
4 minute read
Wells Fargo branch in Washington. Photo: Diego M. Radzinschi / ALM
Wells Fargo & Co. has formally settled for $1 billion allegations the San Francisco-based bank violated consumer protection laws in administering a mandatory insurance program tied to auto loans and assessing certain improper mortgage fees. The bank agreed to pay $1 billion to the Consumer Financial Protection Bureau and $500 million to the Office of the Comptroller of the Currency. The consumer bureau said it credited the $500 million penalty to the satisfaction of the larger fine.
The OCC said its penalty “reflects a number of factors, including the bank's failure to develop and implement an effective enterprise risk management program to detect and prevent the unsafe or unsound practices, and the scope and duration of the practices.”
Wells Fargo executives had earlier told investors the bank was negotiating a settlement with the two agencies. The bank has paid out hundreds of millions of dollars in recent years—to federal regulators and to resolve class actions—stemming from a sham-accounts scandal in which employees opened new accounts without customer authorization. In 2016, the bank paid $100 million to the CFPB to resolve claims tied to the accounts scandal. That amount had marked the largest penalty in the agency's history until now.
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