Wells Fargo, the bank accused of unfairly charging high auto collateral protection insurance to hundreds of thousands of customers, may face a fine of $1 billion from the Consumer Financial Protection Bureau and the Office of the Comptroller of the Currency, according to the New York Times.
Last year, Wells Fargo was snared in a number of scandals involving improperly charging mortgage insurance customers and allegedly charging customers for unnecessary automotive insurance coverage. Both scandals factor into the government’s fine, according to the Times.
Here’s more from the New York Times:
Federal regulators are poised to impose a $1 billion penalty on Wells Fargo for a variety of alleged misdeeds, including forcing customers to buy auto insurance policies that they didn’t need, according to people briefed on the regulatory action.
The expected penalty, levied by the Consumer Financial Protection Bureau and the Office of the Comptroller of the Currency, is likely to be announced Friday.
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The C.F.P.B.’s portion of the $1 billion penalty is likely to represent the largest fine the agency has ever levied. The bureau was created as part of the Dodd-Frank law enacted in response to the global financial crisis.
Some of Wells Fargo’s customers saw their automotive insurance rates unfairly climb almost $600, as Jalopnik has previously reported, in a scheme that affected up to 800,000 people. The company later determined that 570,000 customers qualified for a refund and that the insurance scheme may have led to as many as 20,000 automotive repossessions following an internal review.
In October of last year, Senator Sherrod Brown accused former Wells Fargo CEO John Stumpf of lying to Congress in his 2016 testimony, and in November, the company increased its expected payout to affected customers from $80 million to $130 million.
Federal regulators barred Wells Fargo from expanding until it had satisfied conditions including a change in its board of directors and making structural changes to its internal financial and risk management systems, according to the Times.