No articles found to show on this page.
WASHINGTON (Reuters) – The top U.S. watchdog for consumer finance is seeking a record fine against Wells Fargo Co that could exceed several hundred million dollars for auto insurance and mortgage lending abuses, according to three sources with knowledge of the plans.
The penalty would be the first issued by Mick Mulvaney, who U.S. President Donald Trump tapped in November to head the Consumer Financial Protection Bureau (CFPB).
The fine would fulfill Trump’s vow to come down hard on the country’s third-largest lender, which has been grappling with a sales practices scandal since September 2016.
The CFPB and the U.S. Office of the Comptroller of the Currency (OCC), Wells Fargo’s day-to-day regulator, had been preparing to sanction the bank for receiving commissions on auto insurance policies it helped force on drivers, 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 $100 million the CFPB fined Wells Fargo in September 2016 to settle its phony accounts scandal, said the sources familiar with the talks. 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 $1 billion, said three people with knowledge of the discussions. The CFPB settlement would likely come in partnership with the OCC.
A stiff penalty against Wells Fargo could burnish Mulvaney’s image as a tough regulator even as his agency has dropped cases against at least two payday lenders.
Trump pledged tough penalties for Wells Fargo after Reuters reported in December that Mulvaney had put the mortgage-lending abuse sanctions on ice.
“Fines and penalties against Wells Fargo Bank for their bad acts against their customers and others will not be dropped, as has incorrectly been reported, but will be pursued and, if anything, substantially increased,” Trump wrote on Twitter on Dec. 8.
The OCC and Wells Fargo declined to comment. A spokesman for the CFPB did not respond to a request for comment.
Reporting By Patrick Rucker; Editing by Michelle Price and Meredith Mazzilli