SAN FRANCISCO–Wells Fargo could be hit with as much as a $1-billion penalty just for two of its recent scandals, in this case forcing customers into car insurance they didn’t need and charging mortgage borrowers unfair fees.
Wells Fargo has issued a warning that it may need to revise its Q1 earnings as the result of the potential fine, which it has reportedly been negotiating with the federal government, specifically with the Office of the Comptroller of the Currency and the Consumer Financial Protection Bureau.
The potential fines are not related to the $185-milion in fines the bank has already paid related to a bogus account opening scandal that involved approximately 3.5 million customers.
Instead, the potential $1-billion fine follows Wells Fargo’s 2017 admission that it had charged as many as 570,000 customers for car insurance they did not need. As a result, approximately 20,000 of those customers were forced to default on their loans, with their vehicles repossessed as a result.
Also in late 2017, Wells Fargo admitted that some mortgage borrowers were inappropriately charged for missing a deadline to lock-in interest rates they had been promised, even though the delay was caused by Wells Fargo.
As CUToday.info reported here, Wells Fargo is already operating under an unprecedented punishment handed down by the Federal Reserve earlier this year in response to what it called "widespread consumer abuses” that limit Wells Fargo’s growth to its current $2 trillion in assets until the Fed says it’s satisfied the bank has taken corrective action.
Should the OCC/CFPB assess the fine, it would be noteworthy because the CFPB has taken no enforcement actions since Mick Mulvaney was named acting director.