Wells Fargo has agreed to pay a $250 million fine after the Office of the Comptroller of the Currency (OCC) accused the company of failing to improve oversight of its mortgage business and comply with a 2018 agreement to correct decades of internal failings.
Under a consent order issued by the OCC, the bank agreed to take several steps to improve risk management and customer protection in its home loan operations, three years after Wells Fargo paid a record fine for a series of damaging failures.
Wells Fargo agreed to a 2018 consent order with the OCC and agreed to pay a $1 billion fine after failing to make promised adjustments to customer interest rates on mortgages and auto loans , and forced millions of auto loan customers to buy unnecessary insurance products. These failures are costing Wells Fargo customers millions of dollars and, in some cases, their cars or homes.
“Wells Fargo has failed to meet the requirements of the OCC’s 2018 action against the bank. This is unacceptable,” Acting Comptroller of the Currency Michael J. Hsu said in a statement.
The consent order also prohibits Wells Fargo from transferring any of the mortgages on which it collects payments out of its portfolio. It also prohibits the bank from acquiring rights to service residential mortgages, with some exceptions, until the OCC is satisfied with its progress.
“The OCC will continue to use all the tools at our disposal, including trade restrictions, to ensure that domestic banks resolve issues in a timely manner, treat customers fairly, and operate in a safe and sound manner,” the statement said. order.
In a statement Thursday, Wells Fargo CEO Charles Scharf said the OCC’s order and fine “indicates the work we must continue to do to address significant and long-standing deficiencies.”
“As I have said over the past year, our work to build the right foundations for a company of our size and complexity will not follow a straight line,” he continued. “Having said that, we believe we are making significant progress, the work required is clear and I remain confident in our ability to complete it.”
The OCC order is the latest in a historic series of penalties for Wells Fargo, which has paid billions in fines and legal settlements while facing unprecedented regulatory restrictions for more than a decade of serious misconduct.
Wells Fargo was fined 0 million by the Consumer Financial Protection Bureau in 2016 for opening millions of bank accounts and credit cards to customers without their consent.
Two years later, the Federal Reserve barred Wells Fargo from growing beyond $1.95 trillion in assets following the rogue accounts scandal, mortgage monitoring issues and billing for hidden fees to veterans for refinancing their home loans. The bank still operates below that ceiling after top executives repeatedly failed and even ignored demands from Fed officials to take more aggressive steps to overhaul its internal controls.
Nearly a dozen top Wells Fargo officials, including Scharf’s two full-time predecessors, have been forced out of the bank under pressure from regulators and lawmakers across the political spectrum. Several have also faced civil charges filed by the OCC for failing to keep Wells Fargo in compliance with federal banking laws.