Wells Fargo & Co. will pay $185 million to resolve claims that bank employees opened deposit and credit-card accounts without customers’ approval to satisfy sales goals and earn financial rewards, U.S. regulators said.

The lender opened more than 2 million accounts that consumers may not have known about, the Consumer Financial Protection Bureau said in a statement Thursday. Wells Fargo, which fired 5,300 employees over the improper sales practices, agreed to pay a record $100 million fine to the CFPB, $35 million to the Office of the Comptroller of the Currency and $50 million to the Los Angeles city attorney to settle the matter. The San Francisco-based bank also will compensate customers who incurred fees or charges, the agencies said.

“Wells Fargo employees secretly opened unauthorized accounts to hit sales targets and receive bonuses,” CFPB Director Richard Cordray said in his agency’s statement. “Because of the severity of these violations, Wells Fargo is paying the largest penalty the CFPB has ever imposed.”

The bank agreed to resolve the allegations without admitting or denying the agencies’ accusations, and said in a statement that it had set aside $5 million for customer remediation.

“We regret and take responsibility for any instances where customers may have received a product that they did not request,” Wells Fargo said in its statement.

The thousands of employees terminated by Wells Fargo included managers and were dismissed over five years, said Mary Eshet, a bank spokeswoman.

“On an annual basis, more than 100,000 team members worked in our stores,” she said. “While we regret every interaction that was not handled properly, the number of instances and team members involved represent a very small portion of our business.”

“Each quarter we consider all available relevant and appropriate facts and circumstances in determining whether a litigation matter is material and disclosed in our public filings,” Eshet said. “Based upon that review, we determined that the matter was not material.”

Thousands of employees at Wells Fargo were involved in opening accounts and moving funds that resulted in customers getting charged fees for services they didn’t seek, according to the regulators. Los Angeles City Attorney Mike Feuer sued Wells Fargo last year and accused the bank of high-pressure quotas for workers that encouraged them to skirt the rules.

“When I worked at Wells Fargo, I faced the threat of being fired if I didn’t meet their unreasonable sales quotes every day, and it’s high time that Wells Fargo pays for preying on consumers’ financial livelihoods,” Khalid Taha, a former employee, said in a statement.

Wells Fargo shares rose 13 cents to $49.90 in New York trading Thursday. The stock has dropped 8.2 percent this year, the third-worst performance in the 24-company KBW Bank Index. </s> Retail and commercial banking giant Wells Fargo will pay more than $185 million in fines after US regulators accused the bank of secretly opening accounts without customers' knowledge, officials said Thursday.

The Consumer Financial Protection Bureau said employees at Wells Fargo, the world's largest bank by market value, had illegally boosted sales figures by opening unauthorized deposit and credit accounts and then covertly funding them with customers' money, sometimes creating phony email addresses to enroll them.

This resulted in fees and other charges for customers and improperly helped bank employees meet sales targets and receive bonuses, according to the CFPB.

Wells Fargo will pay $100 million to the CFPB, the largest fine to date imposed by the bureau, which was created in the wake of the 2008 financial crisis.

The San Francisco-based bank will pay $50 million to the City of Los Angeles, which had filed suit last year, accusing the bank of pressuring employees into fraudulent behavior, such as opening fictitious accounts.

The bank will also pay a $35 million fine to banking regulators at the Treasury Department in addition to fully compensating all customers concerned, the CFPB said in a statement.

“Today's action should serve notice to the entire industry that financial incentive programs, if not monitored carefully, carry serious risks that can have serious legal consequences," CFPB Director Richard Cordray said in a statement. </s> Wells Fargo will pay $1 billion to federal regulators to settle charges tied to its mortgage and auto lending business, the latest chapter in years-long, wide-ranging scandal at the banking giant. However, it appears that none of the $1 billion will go directly to the victims of Wells Fargo’s abuses.

In a settlement announced Friday, Wells will pay $500 million to the Office of the Comptroller of the Currency, its main national bank regulator, as well as a net $500 million to the Consumer Financial Protection Bureau.

The action by the CFPB is notable because it is the first penalty imposed by the bureau under Mick Mulvaney, who President Trump appointed to take over the consumer watchdog agency in late November. The $500 million is also the largest penalty imposed by the CFPB in its history, the previous being a $100 million penalty also against Wells Fargo, and matches the largest fine ever handed out by the Comptroller of the Currency, which fined HSBC $500 million in 2012.

In a statement, the OCC said it imposed such a large fine against Wells “given the severity of the deficiencies and violations of law, the financial harm to consumers, and the bank’s failure to correct the deficiencies and violations in a timely manner.”

The fine against San Francisco-based Wells Fargo had been expected. The company disclosed last week that it was in discussions with federal authorities over a possible settlement related to its mortgage and auto lending businesses, and that the fine could be as much as $1 billion.

The settlement also contains other requirements that would restrict Wells Fargo’s business. The bank will need to come with a risk management plan to be approved by bank regulators, and get approval from bank regulators before hiring senior employees.

“While we have more work to do, these orders affirm that we share the same priorities with our regulators and that we are committed to working with them as we deliver our commitments with focus, accountability, and transparency,” said Wells Fargo Chief Executive Tim Sloan in a statement.

The $500 million paid to the Comptroller of the Currency will be paid directly to the U.S. Treasury, according to the order. The $500 million paid to the CFPB will go into the CFPB’s civil penalties fund, which is used to help consumers who might have been impacted in other cases. But zero dollars of either penalty is going directly to Wells Fargo’s victims.

The bank has already been reimbursing customers in its auto and mortgage businesses for these abuses. Wells Fargo has been refunding auto loan customers since July and been mailing refund checks to impacted mortgage customers since December.

On Friday, Wells Fargo adjusted its previously reported first-quarter earnings to reflect the penalty. The nation’s third-largest bank now says it made $4.7 billion in the first 90 days of the year, down from $5.46 billion in the same period a year earlier.

While banks have benefited from looser regulations and lower taxes under President Trump, Wells Fargo has been called out specifically by Trump as a bank that needed to be punished for its bad behavior.

“Fines and penalties against Wells Fargo Bank for their bad acts against their customers and others will not be dropped, as has incorrectly been reported, but will be pursued and, if anything, substantially increased. I will cut Regs but make penalties severe when caught cheating!,” Trump wrote on Twitter back in December.

The abuses being addressed Friday are not tied directly to Wells Fargo’s well-known sales practices scandal, where the bank admitted its employees opened as much as 3.5 million bank and credit card accounts without getting customers’ authorization. But they do involve significant parts of the bank’s businesses: auto lending and mortgages.

Last summer Wells Fargo admitted that hundreds of thousands of its auto loan customers had been sold auto insurance that they did not want or need. In thousands of cases, customers who could not afford the combined auto loan and extra insurance payment fell behind on their payments and had their cars repossessed.

In a separate case, Wells Fargo also admitted that thousands of customers had to pay unnecessary fees in order to lock in their interest rates on their home mortgages. Wells Fargo is the nation’s largest mortgage lender.

Wells Fargo has been under intense scrutiny by federal regulators for several months. The Federal Reserve took a historic action earlier this year by mandating that Wells Fargo could not grow larger than the $1.95 trillion in assets that it currency held and required the bank to replace several directors on its board. The Federal Reserve cited “widespread abuses” as its reason for taking such an action.

This settlement does not involve Wells Fargo’s wealth management business, which is reportedly under investigation for improprieties similar to those that impacted its consumer bank. Nor does this involve an investigation into the bank’s currency trading business.

Consumer advocates have been critical of the Trump administration’s record since it took over the CFPB late last year. However, advocates were pleased to see Wells Fargo held to account.

“Today’s billion dollar fine is an important development and a fitting penalty given the severity of Wells Fargo’s fraudulent and abusive practices,” said Pamela Banks, senior policy counsel for Consumers Union. </s> NEW YORK (AP) — Regulators are fining Wells Fargo $185 million for illegally opening millions of unauthorized accounts for their customers in order to meet aggressive sales goals.

The San Francisco-based bank will pay $100 million to the Consumer Financial Protection Bureau, a federal agency created five years ago; $35 million to the Office of the Comptroller of the Currency and $50 million to the City and County of Los Angeles. It will also pay restitution to affected customers.

The CFPB says Wells Fargo sales staff opened more than 2 million bank and credit card accounts that may have not been authorized by customers.

In a statement, Wells Fargo said: "We regret and take responsibility for any instances where customers may have received a product that they did not request." </s> SAN FRANCISCO >> Wells Fargo agreed on Friday to pay a $1 billion fine to government regulators to settle the banking behemoth’s misdeeds over improper practices in its auto insurance and mortgage businesses, the latest scandal to engulf the banking behemoth — but it’s not assured that victims of the abuses will ever receive any cash as a result of the agreement.

The bank reached the settlement with the Consumer Financial Protection Bureau and the Office of the Comptroller of the Currency, Wells Fargo’s principal government regulator.

“We have said all along that we will enforce the law,” said Mark Mulvaney, acting director of the finance protection bureau. “That is what we did here.”

Wells will pay $500 million to the Comptroller of the Currency, and $500 million to the Consumer Financial Protection Bureau, according to the settlement terms disclosed Friday. It’s the largest fine that the financial protection bureau has ever imposed and matches the largest fine that the currency Comptroller has ever issued.

The Comptroller of the Currency portion will be paid directly to the U.S. Treasury, while the CFPB’s $500 million will go into its civil penalties fund, which is used to help consumers potentially impacted in other cases, according to the order. No Wells Fargo victims will receive any money directly from either penalty, though the bank has already been reimbursing customers in its auto and mortgage businesses for these abuses.

San Francisco-based Wells Fargo has stumbled into hot water several times in recent years, including a scandal that erupted in 2016 linked to the bank’s opening of as many as 3.5 million bogus accounts without its customers’ permission.

“For more than a year and a half, we have made progress on strengthening operational processes, internal controls, compliance and oversight, and delivering on our promise to review all of our practices and make things right for our customers,” Wells Fargo Chief Executive Officer Timothy Sloan said in a prepared release. Sloan, however, added, “We have more work to do.”

In the latest action, regulators penalized Wells Fargo for requiring people to sign up for auto insurance they didn’t need, improperly charging people for mortgages and for failing to maintain adequate risk management.

In 2017, Wells Fargo admitted that it sold auto insurance to hundreds of thousands of its customers that the consumers didn’t want or need. Thousands of customers who weren’t able to keep up with the insurance and vehicle payments lost their cars to repossessions.

Separately, Wells Fargo, the nation’s largest mortgage lender, has admitted that thousands of mortgage customers were forced to pay unnecessary fees to lock in the interest rates on their home loans.

“Wells Fargo had achieved a really lofty reputation, but that reputation has now fallen down to average or below average,” said Marty Mosby, an analyst with Vining Sparks, a Tennessee-based investment firm. “Wells Fargo is going through a confluence of events that has now become a full-fledged storm against their reputation.”

In February of this year, the Federal Reserve ordered that Wells Fargo would not be allowed to grow beyond its $1.95 trillion in assets at the time and ordered the bank to replace four members of its board of directors by the end of this year.

“Widespread abuses” and “compliance breakdowns” were cited by the Federal Reserve for taking the unprecedented action against Wells Fargo, which for decades was a staid and vanilla bank that stayed out of trouble.

Many of the current problems at Wells Fargo have emerged in the decade after Wells bought Wachovia Bank in 2008. That deal helped transform Wells Fargo from a regional bank with a primary focus on the West Coast and the Midwest into a coast-to-coast bank with customers up and down the East Coast and in the Southeast.

But along with its new nationwide reach, the Wachovia deal deposited an array of problems on Wells Fargo’s doorstep. Those negative issues included Wachovia’s high-pressure sales culture that led to the accounts scandal and unsavory mortgage practices that originated with World Savings.

“When Wells Fargo bought Wachovia, that doubled the size of the bank almost instantaneously, and with that increase in size came intrinsic risks that management did not fully comprehend,” Mosby said. “Wells Fargo will be able to absorb these fines. After they take a hit to earnings in one quarter, Wells will move ahead again.”

Will victims of the misdeeds receive any compensation? That’s unclear, although possible.

“The consent order separately requires restitution to harmed consumers via a remediation plan that must be submitted within 120 days to the OCC for review,” Bryan Hubbard, a public affairs official with the Office of the Comptroller of the Currency, said in an email sent to this news organization. </s> Wells Fargo & Co (NYSE: WFC) has agreed to pay a $1-billion fine to the government related to abusive lending and auto insurance practices.

Wells Fargo said Friday that it has agreed to a $1-billion settlement with the Consumer Financial Protection Bureau and the Office of the Comptroller of the Currency that will reduce the company’s $5.9-billion in first-quarter profits by $800 million.

Wells Fargo committed violations related to its mandatory auto loan insurance program and charges for mortgage interest rate lock products, according to the CFPB. As part of the settlement, Wells Fargo agreed to change its policies and reimburse customers who were impacted.

“While we have more work to do, these orders affirm that we share the same priorities with our regulators and that we are committed to working with them as we deliver our commitments with focus, accountability, and transparency,” Wells Fargo CEO Tim Sloan said in a statement.

Wells Fargo has been dealing with regulatory fallout for nearly two years after employees were exposed for creating fraudulent accounts for millions of customers in an attempt to hit aggressive sales targets. The bank was fined $185 million in September 2016 in response to the accounts scandal. The bank also fired 5,300 employees and replaced CEO John Stumpf with Sloan.

Earlier this year, the Federal Reserve restricted Wells Fargo from growing its assets beyond its $2-trillion size until it can demonstrate is has adequately addressed “widespread consumer abuses.”

Some Americans were critical of the fine as yet another slap on the wrist for abuses from huge financial institutions.

Wells Fargo stock traded higher by 2 percent on Friday on investor optimism that, with legacy problems now behind the company, the regulatory environment could soon be much more favorable for big banks. The Trump administration has proposed cutting the funding for the CFPB — the agency created to police the financial sector following the 2008 financial crisis — by $150 million, or roughly 25 percent of its budget.

In addition, Republicans in the Senate passed a bank deregulation bill just last month.

Trump Calls Out OPEC, Says 'Oil Prices Are Artificially Very High' </s> WASHINGTON (Reuters) - Wells Fargo has long been the envy of the banking industry for its ability to sell multiple products to the same customer, but regulators on Thursday said those practices went too far in some instances.

The largest U.S. bank by market capitalization will pay $185 million in penalties and $5 million to customers that regulators say were pushed into fee-generating accounts they never requested.

“We regret and take responsibility for any instances where customers may have received a product that they did not request,” the bank said of a settlement reached Thursday with California prosecutors and federal regulators.

The Consumer Financial Protection Bureau will receive $100 million of the total penalties - the largest fine ever levied by the federal agency.

“Today’s action should serve notice to the entire industry that financial incentive programs, if not monitored carefully, carry serious risks that can have serious legal consequences,” said CFPB Director Richard Cordray.

Los Angeles officials and the Office of the Comptroller of the Currency were also party to the settlement.

In a complaint filed in May 2015, California prosecutors alleged that Wells Fargo pushed customers into costly financial products that they did not need or even request.

Bank employees were told that the average customer tapped six financial tools but that they should push households to use eight products, according to the complaint.

The bank opened more than 2 million deposit and credit card accounts that may not have been authorized, the CFPB said Thursday.

Wells Fargo spokeswoman Mary Eshet said the bank fired 5,300 employees over “inappropriate sales conduct.” The firings took place over a five-year period, Eshet said, adding that the bank has 100,000 employees in its branches.

Wells Fargo regularly releases numbers about how many products it sells to customers, a practice it calls “cross-sell.” Its wealth and investment management unit, for example, sold 10.55 products per retail banking household in November 2015, up from 10.49 a year earlier, according to the bank’s annual 10-K financial filing.

A Wells Fargo branch is seen in the Chicago suburb of Evanston, Illinois, February 10, 2015. REUTERS/Jim Young

In the second quarter, however, the bank changed how it tallies up some of those numbers and said it was considering more changes.

Piper Jaffray analyst Kevin Barker said he does not think the crackdown on Wells Fargo will have much of an impact on others in the industry.

“I think this is unique to Wells Fargo and their particular situation and how hard they push on cross-sell,” he said. </s> Wells Fargo will pay $1 billion to settle federal charges into consumer abuses related to its auto lending and mortgage businesses, the U.S. government said Friday.

Wells Fargo violated the Consumer Financial Protection Act "in the way it administered a mandatory insurance program related to its auto loans," the Consumer Financial Protection Bureau (CFPB) said in a news release.

The fine is the biggest in the history of the CFPB, which was created in 2010 under the Dodd-Frank financial reform law, and the largest bank penalty administered under the Trump administration.

The agency also found Wells violated the CFPA in how it charged certain borrowers for mortgage interest rate-lock extensions.

"While we have more work to do, these orders affirm that we share the same priorities with our regulators and that we are committed to working with them," Wells CEO Tim Sloan said in a separate statement.

Sloan took the top position at Wells after the bank's scandals started blowing up in 2016.

The action came in coordination with the Office of the Comptroller of the Currency (OCC), which said Wells Fargo had failed to maintain adequate risk management controls since at least 2011.

"The bank's failure to implement and maintain a satisfactory compliance risk management program has caused the bank to engage in reckless unsafe or unsound practices and violations of law," the OCC said in a consent decree issued as part of the settlement. </s> A billion-dollar fine is big, for sure, but the bank still faces costs to keep its risk-management system in compliance with regulators.

A billion-dollar fine is big, for sure, but the bank still faces costs to keep its risk-management system in compliance with regulators.

Wells Fargo & Co.'s $1 billion settlement with regulators already has some saying that this marks the end of a troubled period for the scandal-plagued bank. That might be wishful thinking.

Part of the reason for the optimism is the size of the fine. Wells Fargo paid only $185 million for its fake-account scandal, which impacted as many as 3.5 million customers. The current fines are for abuses that relate to about 600,000 auto borrowers who were wrongly charged, as well as a much smaller group of customers at its mortgage division. The excessive fees were generally around $1,000. In total, Wells Fargo estimates that it overcharged all of its auto borrowers by about $80 million going back to 2012. You could argue that the bank shouldn't have to pay a fine of more than 10 times the damage it did, which makes the $1 billion fee hefty indeed.

But the fake account scandal is an odd comparison because while a lot of customers were affected, very few were actually damaged. What's more, part of the settlement over that scandal included the bank firing more than 5,000 employees. There were no mass disciplinary actions in response to the auto-lending abuses. Also, the amount of damages to fines might not even be the right comparison.

Wells Fargo, from 2012 to 2016, made $3.1 billion from auto lending. Its consumer bank in the same time made over $60 billion, and overall the bank netted $100 billion. You can make the case that at least some portion of those profits came from the fact that what Wells Fargo was spending on oversight wasn't what it should have been. So fines to profits, rather than just what customers were overcharged, is likely the right comparison, and on that scale what Wells Fargo is paying isn't that large. After all, the Consumer Financial Protection Bureau is fining Wells Fargo not just for the abusive practices (which is says have stopped), but also for the lack of oversight of its business.

And that's the problem. It's not clear that the oversight issue has been fixed. This past February, the Federal Reserve sanctioned Wells Fargo for not having the correct risk management controls in place. The CFPB isn't convinced either. The settlement agreement includes a large action plan so the bank can prove to regulators that it has the right compliance system in place to make sure the bank's incentive structures don't spin it out of control in the future. That's going to take money, and there has been little evidence that Wells Fargo has dramatically increased what it spends on its risk management, even in the wake of these many scandals.

There's this, too: While Tim Sloan has repeatedly said Well's Fargo's problems are in the past, it's not clear management actually believes that. According to the bank's most recent financial statement, it still expects future legal fees and fines could result in billions more in charges.

Investors have been looking for Well Fargo to cut costs. In fact, the bank has pledged it will. That may please shareholders, but likely not regulators. And right now pleasing regulators may be the best way the bank can eventually please investors.
International banking company Wells Fargo agrees to pay $190 million, including $100 million to the U.S. Consumer Financial Protection Bureau (largest ever for the agency), to settle a case involving deceptive sales that pushed customers into fee-generating accounts they never requested. The bank fired 5,300 employees over "inappropriate sales conduct." The firings took place over a five-year period.