The Consumer Finance Protection Bureau is seeking to impose fines – for a record amount – on Wells Fargo tied to the banking giant’s practices in the auto insurance and mortgage lending realms.
The fines, with an eye on abuses in those practices, could top hundreds of millions of dollars, according to Reuters, which cited three unnamed sources with “knowledge of the plans.”
The newswire noted that the penalties would be the first to be issued by recently-installed CFPB acting director Mick Mulvaney, and would also “fulfill [President Donald] Trump’s vow to come down hard” on Wells, which has been in the headlines over sales practices and lending practices.
The fines could be as much as $1 billion, the sources told Reuters.
Mulvaney’s actions – which Reuters reported would “dwarf” the $100 million fine Wells paid in September — would come in the wake of news that the company had levied extra insurance (and took commissions) on auto policies. In addition, the company also charged unnecessary fees on mortgage borrowers. The fines that would come from the CFPB would come in tandem with those imposed by the Comptroller of the Currency, which, as Reuters noted, has day-to-day oversight of Wells.
In reference to auto insurance, key issues revolve around whether Wells treated different customers differently. Drivers financing a car through dealerships could be required to buy insurance in the event Wells had thought a policy had in fact lapsed, yet consumers who went to Wells itself were not required to buy additional insurance. This insurance was known as “force place” insurance.
Reuters said that Mulvaney might be questioned about a settlement discussion when he appears before Congress at separate hearings scheduled for Wednesday and Thursday.