The hits just keep on coming for Wells Fargo. As if the $185 million settlement/penalty the bank has already paid to resolve the fake accounts issue wasn’t bad enough, Wells Fargo could now face up to $1 billion in penalties for auto insurance and mortgage lending abuses according to a new CNBC article and Reuters report. To recap the series of missteps made by the bank over the last several years, including other penalties and settlements paid, check out some of the other articles written below by my colleagues:
- Harming Consumers Again—Overcharging for Auto Insurance
- Predatory Lending Practices Against the Navajo Nation
- Improper Credit Reporting Post Bankruptcy
- Fraud Extends to Life Insurance
Why Is Wells Fargo Facing an Even Larger Fine?
What prompted the most recent and likely record setting fine? In the mortgage arena, Wells Fargo allegedly made changes to borrowers’ accounts (without their permission) that lowered monthly obligations but extended the life of the loan for decades. Concerning the auto insurance mishap mentioned in the first article above, the bank charged around 800,000 people with insurance they did not need at the time those consumers took out car loans.
On the Bright Side…
While this is certainly just more negative headlines for Wells Fargo, the articles on the issue have also focused on Mike Mulvaney, the new head of the Consumer Financial Protection Bureau (CFPB). This is the first significant penalty pursued since Mulvaney, who also heads the Office of Management and Budget, took over the CFPB. Consumer advocates have speculated that the CFPB’s regulatory direction and authority would shift under the new leadership. Still, the agency seems to be focused on its core mission in pursuing egregious acts by Wells Fargo, and for that, we should all be thankful.