Wells Fargo, the embattled national bank, could be slapped with a $1 billion fine as soon as Friday (April 20), reported CNN Money.
Citing a person familiar with the enforcement act, CNN Money reported the Consumer Financial Protection Bureau and the Office of the Comptroller of the Currency will announce the fine potentially later Friday (April 20), marking the severest action by the Trump Administration against a financial services company. The fine stems from its auto unit, in which the bank was forced last year to apologize for giving 570,000 customers car insurance they didn’t want or ask for. An internal review by Wells Fargo found that around 20,000 customers may have defaulted on their auto loans and lost their vehicles partly because of the cost of the auto insurance that they didn’t request but was tacked on to their loans.
According to CNN Money, fining Wells Fargo $1 billion would be a departure for Mick Mulvaney, the acting director of the CFPB, appointed by President Donald Trump. He has been an outspoken critic of the government watchdog — and as a congressman, he wanted the agency dismantled. As the head of the CFPB, he has halted all new actions, postponed increased regulation on the payday lending market and dropped lawsuits against companies in that space. He has also said the agency hasn’t engaged in any new enforcement actions since he took over.
This also comes after the Federal Trade Commission made the unprecedented move to place limits on the size Wells Fargo can grow. Wells Fargo is prevented from growing beyond $1.95 trillion in assets, which is where it ended 2017, but was granted permission to continue lending and accepting banking deposits. The bank has recently been embattled in scandals, including opening accounts without customers’ knowledge or permission and forcing thousands more into auto insurance they didn’t need or want. Wells Fargo expects the Fed’s action to reduce its profit this year by between $300 million and $400 million on a pre-tax basis. It also has 60 days to improve the board governance oversight and compliance and risk management.