https://www.reuters.com/busine...nagement-2022-12-20/

December 20, 20224:23 PM CST
By Chris Prentice and Hannah Lang

WASHINGTON, Dec 20 (Reuters) - The U.S. Consumer Financial Protection Bureau hit Wells Fargo & Co (WFC.N) with the watchdog's largest ever civil penalty on Tuesday as part of a $3.7 billion agreement to settle charges over widespread mismanagement of car loans, mortgages and bank accounts.

The consumer watchdog ordered the bank to pay a $1.7 billion civil penalty, and another $2 billion to redress more than 16 million customer accounts affected by the violations, the regulator said in a statement.

The bank illegally charged fees and interest on auto loans and mortgages, had cars wrongly repossessed and imposed unlawful surprise overdraft fees, among other issues, the CFPB said.

"Wells Fargo is a corporate recidivist that puts one-third of American households at risk of harm,” CFPB Director Rohit Chopra told journalists in a briefing. "We are concerned that the bank's product launches, growth initiatives and other efforts to increase profits have delayed needed reform."

He added that regulators should consider whether to apply additional limitations on the bank beyond the $1.95 trillion asset cap the U.S. Federal Reserve imposed in 2018, which Federal Reserve Chair Jerome Powell has said will remain in place until the firm’s problems are fixed.

Shares of Wells Fargo were down about 1% in early afternoon trading.

"While we do not see today's action as having a direct read-though to the asset cap and its potential removal, we would take today's announcement as a sign of positive progress on moving toward that ultimate goal," Ken Usdin, an analyst at Jefferies, wrote in a note.

Wells Fargo said the settlement will resolve issues that have been outstanding for several years, and noted in a statement it has "accelerated corrective actions and remediation" since 2020.

"This far-reaching agreement is an important milestone in our work to transform the operating practices at Wells Fargo and to put these issues behind us," Charlie Scharf, the bank's chief executive officer, said in a statement.

The fine for Wells Fargo is the latest in a series of actions that underscore the CFPB's more aggressive posture under President Joe Biden's administration.

Tackling corporate recidivism has emerged as a key priority under Biden, who entered the White House in early 2021. Last year, the Justice Department rolled out a series of policy changes aimed at better deterring repeat misconduct.

The CFPB and other banking regulators have taken multiple enforcement actions against Wells Fargo - including consent decrees that legally compel the bank to address violations across its business lines.

There are currently nine open consent orders against the company, stemming from a sales scandal that publicly erupted in September 2016. Two of the consent orders will be terminated in three years if Wells Fargo confirms to regulators that it has made the required fixes.

In 2020, the Office of the Comptroller of the Currency (OCC) banned former Wells Fargo CEO John Stumpf from the banking industry and fined him $17.5 million to settle charges he failed to put an end to sales misconduct.

Wells Fargo’s management team and board have changed dramatically since then, implementing new incentives and risk-management procedures. Scharf became CEO in 2019, the fourth person to lead Wells Fargo since the scandal emerged.

Chopra noted that the agreement does not provide any immunity for any individuals, although officials declined to elaborate.

“We have made significant progress over the last three years and are a different company today,” Scharf said. “We remain committed to doing the right thing for our customers."

Wells Fargo expects to book an expense of about $3.5 billion in its fourth quarter earnings, including costs from the CFPB penalty, customer remediation and litigation, the company said. It will report results on Jan. 13.

Mike Calhoun, president of the Center for Responsible Lending (CRL), praised the CFPB's "laser focus on protecting consumers" in a statement.

“Wells Fargo is a repeat offender for abusive customer practices, and it is critical that the CFPB holds the lender accountable for its illegal conduct," Calhoun said.

I don’t follow them. But seems like they get fined pretty often.

With everything Wells Fargo has done over the years, I don't know why anyone would do business with them. They are right up there with at&t.

I had several hundred thousand dollars of loans for construction equipment with Wells Fargo, worst
experience I ever had in 50 years of business.

quote:

Originally posted by konata88:
I don’t follow them. But seems like they get fined pretty often.

Yep. They've been repeatedly slapped with fines and other consequences for at least the past decade. And from what the CFPB is saying, this isn't the final shoe to drop for Wells Fargo, or some of the individuals involved.

[/QUOTE]

Yep. And this isn't the final shoe to drop for Wells Fargo, or some of the individuals involved.[/QUOTE]

Let’s hope they nail a few (or more) of the people responsible for this continuing criminal enterprise, masquerading as a bank.

If the US government says that WF is a bad actor that must be the case.

They bought out First Union. After that, it was all down hill and the tellers were very unfriendly.

quote:

Originally posted by Jupiter:
With everything Wells Fargo has done over the years, I don't know why anyone would do business with them. They are right up there with at&t.

Many people don't have a choice as they are the outfit that bought our mortgages.

That's the only business I do with them and thankfully that will come to an end in 18 months.

Wells Fargo and Bank of America should both be shut down. Fucking criminal organizations.

quote:

Originally posted by Leemur:
Wells Fargo and Bank of America should both be shut down. Fucking criminal organizations.

Never going to happen, when their big boss, the biggest criminal organization, is in DC.

Those who work in banking are familiar with an employee's U-Five document. It's like a background check so someone doing shady things can't just go from bank to bank.

WF wrote up the U-Fives of some of the lower level employees who were "just doing as they were told" and opened false accounts etc. to boost sales.

I guess I find it sad that lower level employees are written up, but the bosses skate by with 7 figure bonuses.

quote:

Originally posted by 41:
They bought out First Union. After that, it was all down hill and the tellers were very unfriendly.

If I worked for either of those organizations, I'd probably end up being pretty unfriendly too.

Up here, they changed their name to Flagstar.

quote:

Originally posted by YooperSigs:
Up here, they changed their name to Flagstar.

Those actually got bought out. Flagstar is not affiliated with Wells Fargo.

Rather, Flagstar Bank (a local Michigan bank) bought around 50 Wells Fargo branches in Indiana, Ohio, Michigan, and Wisconsin in 2018 as part of a large expansion.

quote:

Originally posted by Jupiter:
I don't know why anyone would do business with them

Did business with them as a depositor when I first moved to CA decades ago. They sucked, I moved to First Interstate.

WF bought First Interstate, they sucked, I moved to Crocker.

WF bought Crocker, they sucked, I moved to Washington Mutual.

WF bought WaMu, they sucked. We moved to North Carolina and I found Wachovia. They were great!

WF bought Wachovia, they sucked.....

At that point, we gave up. We have better things to do than scout out new acquisitions for the borg. We know how to work the WF system to avoid fees, and that's what we do.

That said, we have had WF mortgages a couple times over the years, and that worked out ok - never had any issues at all with them as a creditor.