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Regulators slap Wells Fargo with $1bn fine for car loan and mortgage abuses
(WebFG News) - US regulators fined Wells Fargo $1bn on Friday for car loan and mortgage abuses.
The Office of the Comptroller of the Currency and the Consumer Financial Protection Bureau each slapped a $500m fine on the bank.
The regulators found that Wells Fargo had violated the Consumer Financial Protection Act (CFPA) in the way it administered a mandatory insurance programme related to its auto loans. They also found that the bank had violated the CFPA in how it charged certain borrowers for mortgage interest rate-lock extensions.
President and chief executive officer Timothy J. Sloan, said: "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.
"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 with focus, accountability, and transparency. Our customers deserve only the best from Wells Fargo, and we are committed to delivering that."
As a result of the fines, Wells Fargo said it will adjust its first-quarter 2018 preliminary results by an additional accrual of $800m, which is not tax deductible. This will reduce reported Q1 net income by $800m, or $0.16 a share per diluted common share, to $4.7bn.
In addition to the fines, the bank will also be made to submit, for review by its board, plans detailing its ongoing efforts to strengthen its compliance and risk management, and its approach to customer remediation efforts.
At 1445 BST, the shares were up 1.1% to $52.09.