Date
21 November 2018
Wells Fargo is reported to be facing a record fine from the top US consumer watchdog over its auto insurance and mortgage lending practices. Photo: Reuters
Wells Fargo is reported to be facing a record fine from the top US consumer watchdog over its auto insurance and mortgage lending practices. Photo: Reuters

Wells Fargo faces huge fine over auto, mortgage abuses: report

The US consumer finance watchdog is seeking a record fine against Wells Fargo for auto insurance and mortgage lending abuses, Reuters reports, citing sources with knowledge of the plans.

The Consumer Financial Protection Bureau (CFPB) is eyeing a fine that could exceed several hundred million dollars against the third-largest US bank, according to the report.

The penalty would be the first issued by Mick Mulvaney, whom President Donald Trump tapped in November to head the nation’s top watchdog for consumer finance.

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.

The agencies are ready to sanction the bank for layering extra insurance on drivers and collecting commissions on those policies, Reuters reported last month.

Both agencies have also been investigating the bank for wrongly levying fees on mortgage borrowers.

Mulvaney is eyeing a penalty that would settle both those matters and dwarf the US$100 million the CFPB fined Wells Fargo in September 2016 to settle its phony accounts scandal, Reuters cited its sources as saying. That 2016 fine had been the CFPB’s largest ever.

Settlement terms have not been finalized but Mulvaney is pushing for a figure as high as US$1 billion, according to the sources.

Wells Fargo is due to report earnings on Friday and some officials hoped to have a deal by then.

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RC

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