Wells Fargo agreed on Friday to pay $1 billion to settle federal claims of misconduct in its auto and mortgage lending businesses, the Wall Street Journal reports. The settlement with the Consumer Financial Protection Bureau and the Comptroller of the Currency (OCC) concerned the bank’s failures to catch and prevent problems, including improper charges to consumers in its mortgage and auto-lending businesses. The fine is the largest against a bank so far in the Trump administration and a signal that while officials are working to ease regulatory rules, they won’t let companies off the hook for misconduct.
The bank also agreed to offer restitution to customers and improve risk and compliance management practices as part of the settlement. The OCC’s enforcement order requires the bank to “obtain a prior written determination of no supervisory objection” from the agency before appointing any senior executive officers or directors. The bank also would have to seek the OCC’s approval before making payments to certain senior employees. “The OCC took these actions given the severity of the deficiencies and violations of law, the financial harm to consumers, and the bank’s failure to correct the deficiencies and violations in a timely manner,” the OCC said. The settlement covers the bank’s practices in two main areas: charging improper fees for rate-lock extensions in mortgage lending and selling unwanted insurance products to auto-loan customers. The settlement is the latest in a series of regulatory woes for the San Francisco-based bank. It has faced scrutiny of illegal sales practices that involved the opening of as many as 3.5 million accounts without customers’ consent. Regulators have since probed the bank’s practices in auto lending, mortgages, wealth and investment management, and foreign exchange.