Wells Fargo to Pay $1 Billion to Settle Risk Management Claims -- Update
April 20 2018 - 10:18AM
Dow Jones News
By Yuka Hayashi
WASHINGTON -- Wells Fargo & Co. agreed to pay $1 billion to
settle federal claims of misconduct in its auto and mortgage
lending businesses.
The settlement with the Consumer Financial Protection Bureau and
Office of the Comptroller of the Currency concerned the bank's
failures to catch and prevent problems, including improper charges
to consumers in its mortgage and auto-lending businesses.
The fine is the largest against a bank so far in the Trump
administration.
The bank also agreed to offer restitution to customers and
improve risk and compliance management practices as part of the
settlement.
"The OCC took these actions given the severity of the
deficiencies and violations of law, the financial harm to
consumers, and the bank's failure to correct the deficiencies and
violations in a timely manner," the OCC said in its release
detailing the settlement.
The regulator added that it "found deficiencies in the bank's
enterprisewide compliance risk management program that constituted
reckless, unsafe or unsound practices."
The settlement covers the bank's practices in two main areas:
charging improper fees for rate-lock extensions in mortgage lending
and selling unwanted insurance products to auto-loan customers.
"For more than a year and a half, we have made progress on
strengthening operational processes, internal controls, compliance
and oversight, and delivering on our promise to review all of our
practices and make things right for our customers," said Timothy J.
Sloan, president and chief executive officer of Wells Fargo. "While
we have more work to do, these orders affirm that we share the same
priorities with our regulators and that we are committed to working
with them as we deliver our commitments."
The settlement is the latest in a series of regulatory woes for
the San Francisco-based bank. It has faced a number of regulatory
problems in recent years, including regulatory scrutiny of illegal
sales practices that involved the opening of as many as 3.5 million
accounts without customers' consent. Regulators have since probed
the bank's practices in auto lending, mortgages, wealth and
investment management and foreign exchange.
Write to Yuka Hayashi at yuka.hayashi@wsj.com
(END) Dow Jones Newswires
April 20, 2018 10:03 ET (14:03 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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