A U.S. banking regulator is seeking a record fine of as much as $1 billion against Wells Fargo for auto insurance and mortgage lending abuses, news agency Reuters reported Monday.
The penalty would be the first issued by former Charlotte-area congressman Mick Mulvaney, whom President Donald Trump tapped last year to head the Consumer Financial Protection Bureau, Reuters reported. Reuters, citing sources with knowledge of the plans, said the regulator is readying sanctions alongside the Office of the Comptroller of the Currency, an independent bureau of the Treasury Department that regulates national banks.
Wells Fargo, the CFPB and the OCC declined to comment.
Last year, Wells Fargo disclosed problematic practices involving auto insurance and mortgage products. Those practices included improperly charging customers to lock in mortgage interest rates, and charging customers premiums for auto insurance they didn’t need.
Those disclosures came as the San Francisco-based bank was still reeling from a 2016 scandal over unauthorized customer accounts, a practice for which the CFPB fined Wells a record $100 million. The OCC also fined the bank $35 million in a related action.
Mulvaney is eyeing a penalty that would resolve the mortgage and auto insurance matters, but settlement terms have not been finalized, according to Reuters.
Trump, in a tweet last December, took aim at Wells Fargo, writing that fines and penalties against the bank “will not be dropped.” The tweet came after news reports that Mulvaney was reviewing whether Wells should pay tens of millions of dollars over alleged mortgage abuses.
In a research note Monday, Jaret Seiberg, an analyst with Cowen and Co., said even a settlement of $1 billion would not eliminate the pressure Wells Fargo remains under from some elected officials. If anything, a penalty that size is likely to result in even more pressure on the bank, he wrote.