Wells Fargo is reportedly expected to face a $1 billion settlement with federal regulators as soon as Friday for its auto insurance and mortgage practices.
The Consumer Financial Protection Bureau and the Office of the Comptroller of the Currency will fine the megabank for poor risk management, according to the Wall Street Journal. Since its fake accounts scandal that resulted in $185 million in fines in 2016, Wells Fargo has faced a number of other reports of bad behavior, including that the creation of unwanted accounts was more widespread than was initially thought.
The fine is likely to be the biggest in the relatively short history of the CFPB, the agency now headed by the conservative Mick Mulvaney.
Wells Fargo warned investors last week that the two agencies had offered to resolve the probes for a collected $1 billion in civil monetary penalties.
The fines, it said, would be for its risk management practices and for charging hundreds of thousands of customers for auto insurance they didn’t want, as well as practices related to extending mortgage interest rate locks.
Representatives for the bank declined to comment.
Although the Trump administration has pursued a deregulatory agenda, and the CFPB has been criticized by Democrats for easing off other probes, Trump and Republicans have signaled that they want tougher action against Wells Fargo.
In December, Trump tweeted that his government would seek bigger fines on the bank. “I will cut Regs but make penalties severe when caught cheating!” he remarked.
Congressional Republicans have tried to limit the CFPB’s powers, and the Trump-appointed acting director, Mulvaney, helped lead the charge during his time as a member of the House Financial Services Committee.
But Republicans also faulted the CFPB for not catching Wells Fargo’s creation of fake accounts earlier and criticized the bank with Democrats when its CEO testified about the scandal.
The CEO, John Stumpf, eventually left the bank because of the controversy. He was succeeded by Tim Sloan, who was previously the chief operating officer.
In addition to the 2016 fines, Wells Fargo also faced an unusual regulatory crackdown in February, when the Federal Reserve restricted it from growing as a penalty for “widespread consumer abuses.” Simultaneously, the bank announced plans to replace four members on its board of directors.
That rebuke was the last act of former Fed Chairwoman Janet Yellen. She was joined by then-Governor Jerome Powell, who is now the chairman of the central bank.
