Economy

Wells Fargo faces huge fine over auto, mortgage abuses

The top USA consumer finance regulatory agency is seeking a record fine against Wells Fargo that could exceed several hundred million dollars for auto insurance and mortgage lending abuses, Reuters reported on Monday.

Wells is still trying to recover from the significant hit to its reputation after it agreed to pay $190 million in September 2016 to settle charges that thousands of employees opened millions of bank and credit card accounts in order to collect bonuses and keep their jobs.

The CFPB is said to be readying sanctions alongside the Office of the Comptroller of the Currency (OCC), Wells Fargo's day-to-day regulator.

According to Reuters, the penalty could be as high as a $1 billion. That fine had been the agency's largest ever, according to Reuters.

Wells Fargo CEO Tim Sloan on the Federal Reserve's decision to impose penalties on the bank.

Mulvaney, the White House budget director, has been critical of how aggressively the agency was run under the Obama administration.

Last year, Wells Fargo disclosed problematic practices involving auto insurance and mortgage products. A spokesman for the CFPB did not respond to a request for comment. Speculation about the CFPB penalty also comes just days before Mulvaney starts two rounds of congressional hearings - his first devoted to his role as the bureau's acting chief.

In the case of Wells Fargo and auto insurance, agency lawyers have raised concerns about how different customers received different treatment from the bank. Drivers who went directly to the bank for a loan were not subject to such "force-place" insurance after 2011, the bank has said. But the large fines would align with President Donald Trump's statement in December that Wells Fargo would face stiff penalties for charging fees to certain homebuyers to secure low mortgage rates.



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