Avoiding the “ Rinse-Repeat ” Cycle of Regulatory Violations : Wells Fargo
Wells Fargo Bank is not only one of the United States largest banks , but also holds the second place spot in one violation tracker ’ s top companies for regulatory violations , and third place for total dollar value of all penalties . The bank has had a total of 230 records of regulatory violations and nearly $ 26 billion in penalties .
Some of the past violations include :
• Illegal student loan servicing , in which Wells Fargo paid a $ 3.6 million penalty to the Consumer Financial Protection Bureau ( CFPB ).
• Secretly and illegally opening unauthorized accounts , where the bank paid $ 100 million .
• A 2018 settlement action for Wells Fargo ’ s harmful auto loan administration and mortgage practices , in which the CFPB issued a $ 1 billion penalty .
All of these violations have one thing in common : The issues found by the CFPB had been long-standing , and many , if not all the violations were found to be either breakdowns in the servicing processes or inadequate compliance measures . Most of these penalties were likely preventable .
The most recent regulatory violation from Wells Fargo includes a $ 3.7 billion penalty , $ 2 billion of which is in redress to hurt consumers , and $ 1.7 billion in a civil penalty for legal violations across several of product lines . These penalties come from :
• Misapplied loan payments
• Wrongful foreclosures of consumer homes
• Incorrectly assessed fees and interest
• Surprise overdraft fees
• And other illegal activities , which allegedly has affected over 16 million consumer accounts
The 32-page consent order came out in December 2022 , but most of the citations of violations should seem very familiar . Each of the issues cited in the consent order have been identified , or known of , in some capacity for a number of years , with certain illegal practices being tracked to beginning in 2011 . In many of the cases , the consent order specifies that Wells Fargo knew of the issues , but was slow to resolve the inadequate internal practices .
• Illegally repossessed vehicles
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