Wells Fargo faces CFBP demand for $1B fine – report (NYSE:WFC)

In talks with Wells Fargo (NYSE:WFC), the Consumer Financial Protection Bureau (CFPB) is seeking more than $1B to settle a string of investigations into the bank’s alleged mistreatment of customers, Bloomberg reported, citing people with direct knowledge of the situation.

The talks encompass Wells Fargo’s (WFC) consumer deposit, mortgage lending, and automobile lending practices, and continues years of investigations after it was discovered in 2016 that the bank’s employees had opened millions of bogus accounts to reach their sales targets. The CFPB has become increasingly frustrated with the bank, which has been fined multiple times in the past six years, the Bloomberg report said.

In Q3, the San Francisco-based bank set aside $2B for costs related to litigation, customer remediation, and regulatory matters. CEO Charlie Scharf was brought in from BNY Mellon (BK) in October 2019 to restore the bank’s reputation with customers and regulators after the scandals.

In 2018, Wells Fargo (WFC) entered into consent orders with the Office of the Comptroller of the Currency and the CFPB, under with it agreed to pay a $1B fine for issues in its mortgage and auto loan units. Later that year, it agreed to pay $575M in a settlement with state Attorneys General. In September 2021, the OCC fined the bank $250M for alleged deficiencies in its home lending program and violations of its 2018 compliance consent order.

Less than two months ago, Scharf told legislators that the bank has “much more work to do” and it will take several years to accomplish. Enhancing and implementing an appropriate risk and control framework, is the company’s “number one priority,” he said.