The Consumer Financial Protection Bureau (CFPB) assessed last week a $1billion penalty against Wells Fargo Bank for running an illegal mandatory insurance program related to its auto loans.
The CFPB, in conjunction with the Office of the Comptroller of the Currency (OCC), found that Wells Fargo also violated the Consumer Financial Protection Act (CFPA) in how it charged certain borrowers for mortgage interest rate-lock extensions.
Wells Fargo agreed to remediate harmed consumers and undertake certain activities related to its risk management and compliance management.
“I am especially pleased that we were able to work closely and effectively with our colleagues at the OCC, and I appreciate the key role they played in the negotiations,” CFPB Acting Director Mick Mulvaney said. “As to the terms of the settlement: we have said all along that we will enforce the law. That is what we did here.”
Rep. Jeb Hensarling (R-TX), chair of the House Financial Services Committee, said this is one of the largest penalties imposed on a bank.
“Fraud is fraud and theft is theft,” Hensarling said. “What happened to far too many customers at Wells Fargo for far too many years cannot be described any other way. One billion dollars is one of the largest civil penalties ever imposed upon a bank and, based on all the evidence, it was well deserved.”
Hensarling added that the individuals responsible for these violations must also be held responsible.
“I know that Wells Fargo has many dedicated employees who do serve their customers well and had nothing to do with the wrongful acts,” Hensarling said. “We all look forward to the current management concluding all necessary reviews and restructuring so that Wells Fargo can once again regain the trust and respect it once had.”