Wells Fargo Earnings Again Hit by Regulatory Charges with Another $2 billion in Charges

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    ThePitBoss
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    Wells Fargo reported better than third quarter earnings before the bell Friday, other than an additional $2 billion to resolve a variety of legacy reg
    [See the full post at: Wells Fargo Earnings Again Hit by Regulatory Charges with Another $2 billion in Charges]

    #47212
    Truman
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    Wells Fargo (WFC 47.05 +0.31 +0.66%): is under pressure to pay $1 bln to CFPB, according to Bloomberg.

    Wells Fargo is facing pressure from the Consumer Financial Protection Bureau to settle several of the agency’s investigations into the firm for a total of more than $1 billion, according to news reports.

    The agency is in confidential talks with Wells Fargo about the settlement, floated as a result of the CFPB’s growing frustration with the firm, Bloomberg writes, citing people with direct knowledge of the matter.

    Wells has been sanctioned numerous times by U.S. regulators in recent years over a variety of offenses, starting with the 2016 revelations that thousands of its retail bank employees opened millions of bogus accounts without clients’ knowledge, to meet aggressive sales targets.

    Earlier this year, meanwhile, CFPB director Rohit Chopra — appointed by President Joe Biden — promised a tougher stance and sanctions on large firms repeatedly caught violating regulations, according to the news service.

    The people familiar with the matter add that the negotiations aren’t close to an agreement and that one isn’t likely to be announced this month, Bloomberg writes.

    In addition, because Chopra has signaled that he would pursue harsher punishments on larger firms, the financial penalty may not be the end of it: The CFPB may demand restrictions on Wells Fargo’s businesses or other penalties, according to the news service.

    “Corporate recidivism has become normalized and calculated as the cost of doing business,” Chopra said in March, according to Bloomberg. “We must forcefully address repeat lawbreakers to alter company behavior and ensure companies realize it is cheaper, and better for their bottom line, to obey the law than to break it.”

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    Wells Fargo earmarked $2 billion in the third quarter for settling regulatory and legal matters, Bloomberg writes. In a filing this week, Wells Fargo disclosed that its latest settlement talks with the CFPB involved automobile and mortgage lending as well as consumer-deposit accounts but didn’t put a dollar figure on a possible resolution, according to the news service.

    Negotiators in the talks have discussed around $1 billion, the people tell Bloomberg.

    The settlement would be a record amount, though the previous record CFPB settlement was also with Wells Fargo, according to the news service. The agency had fined the firm $100 million over the 2016 fake account scandal but two years later ordered the firm to pay $1 billion for violations related to its other lines of business, Bloomberg writes.

    While the CFPB at the time gave Wells Fargo a credit of $500 million for a concurrent settlement with the Office of the Comptroller of the Currency, the agency is likely to consider $1 billion the previous record when determining the amount of the latest fine, according to the news service.

    Spokespeople for the CFPB and for Wells Fargo declined comment to Bloomberg.

    Meanwhile, Wells Fargo Chief Executive Officer Charlie Scharf said last month that the $2 billion set aside last quarter “isn’t the end of it,” according to the news service.

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