WASHINGTON–The CFPB at one point had determined it could pursue a $10-billion penalty against Wells Fargo over its account-opening scandal, before finally settling on a much smaller amount, according to newly released documents.
The documents, released by House Republicans as part of their investigation, included a July 2016 memo written by Consumer Financial Protection Bureau lawyers also reveal that Wells Fargo had fired or disciplined around 10,000 employees related to its sales practices scandal, approximately double the number previously believed, according to the Wall Street Journal.
In that same memo, written approximately two months before the CFPB acted, agency enforcement lawyers alleged that the bank had made “more than two-million violations” of the consumer financial protection law related to opening of unauthorized customer accounts. Those violations, they said, opened the door to a huge fine based on the lowest penalties included in the law, the Journal reported.
The lawyers recommended a $100-million penalty to “help resolve this case,” stating that anything smaller would “sufficiently deter similar violations” and correct the bank’s behavior.
As CUToday.info has reported, in September 2016, Wells Fargo agreed to pay the $100-million fine to the CFPB as part of a $185-million settlement with federal and state regulators over practices that involved opening of millions of accounts without customers’ knowledge.
Meanwhile, while Wells Fargo has stated it fired 5,300 employees over a five-year period for opening the fake accounts, the report from the House Financial Services Committee suggests the actual number was 10,000 employees who were fired or disciplined.
In all, it is now believed that Wells Fargo opened as many as 3.5 million bogus accounts for customers as its employees sought to meet aggressive sales goals.
The House committee report alleges that the scaling back of the fine indicated the CFPB rushed into a settlement, fearing that it might fall behind the Los Angeles City Attorney’s Office and the Office of the Comptroller of Currency that were also investigating the case, according to the Wall Street Journal.