Wells Fargo has agreed to pay a fine of $1bn to US regulators to settle allegations of unsound practices in mortgage and auto lending businesses that led to customers paying extra fees.
The Consumer Financial Protection Bureau (CFPB) and the Office of the Comptroller of the Currency (OCC) have accused the bank of imposing unwanted insurance programmes on customers opting for its auto loans.
The watchdogs also alleged that the bank imposed improper fees for locking in interest rates for mortgages.
The bank will pay a fine of $500m each to the CFPB and the OCC for its violations.
Moreover, OCC reserves the right to impose business restrictions on the bank, as well as make changes to its board.
The latest fine on Wells Fargo is the first announced by CFPB since the appointment of Mick Mulvaney as the agency’s new acting director. The fine also matches the largest ever for the OCC.
“As to the terms of the settlement: we have said all along that we will enforce the law. That is what we did here,” Mulvaney said.
The latest fine increases problems at Wells Fargo, which is already under the scanner for the illegal sales practice of secretly opening unauthorised deposit and credit card accounts.
Wells Fargo president and CEO Timothy Sloan said: “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. Our customers deserve only the best from Wells Fargo, and we are committed to delivering that.”