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Wells Fargo faces potential record fine over auto, mortgage abuses: Report

Key Points
  • Wells Fargo faces a record fine of at least several hundred million dollars for consumer abuses, according to a report.
  • The bank, which has labored under a fake accounts scandal and other black eyes since September 2016, is being targeted by the Consumer Financial Protection Bureau.
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Regulator seeks to fine Wells Fargo as high as $1 billion, says Reuters

Wells Fargo faces a record fine of at least several hundred million dollars for consumer abuses, according to a report.

The bank, which has labored under a fake accounts scandal and other black eyes since September 2016, is being targeted by the Consumer Financial Protection Bureau, Reuters reported, citing sources.

The bank already has paid a $100 million CFPB penalty to settle the fake accounts issue, in which employees opened some 3.5 million accounts for customers without their knowledge. Employees involved were trying to meet aggressive sales goals, which have since been discontinued. That fine was part of a $185 million settlement Wells made with various authorities.

For the latest fine, Wells Fargo would pay for auto insurance and mortgage lending abuses. Reuters pointed out that this would be the first major penalty issued by CFPB since Mick Mulvaney, who also heads the Office of Management and Budget, took over.

Mulvaney may push for a fine as high as $1 billion, Reuters reported.

Wells Fargo declined to comment and the CFPB did not immediately respond to a request for comment.

In the mortgage case, the bank allegedly made unauthorized changes to borrowers' accounts that lowered monthly payments but extended the terms in some cases for decades.

The auto insurance infractions involve cases where employees forced more than half a million drivers to buy coverage they did not need. The bank blamed the situation on a third-party vendor.

The full Reuters story can be read here.