- Wells Fargo has been fined $ 250 million from the OCC related to its mortgage business.
- The bank said a separate 2016 consent order on sales practices has now expired.
- Wells Fargo CEO Charlie Scharf has been on a mission to reshape the bank since he arrived in 2019.
Even though Wells Fargo has announced the expiration of a 2016 consent order imposed by federal regulators following a fraudulent account scandal, it now faces a further fine of $ 250 million related to issues related to bank mortgage loss modification practices.
The Office of the Comptroller of the Currency said that the civil monetary penalty and related cease and desist order were issued against the bank for “unsafe or ill-advised practices” related to its mortgage management business and for failing to resolve compliance issues and risk raised in a 2018 OCC Consent Order.
“Wells Fargo has failed to meet the demands of OCC’s 2018 action against the bank. This is unacceptable,” Michael J. Hsu, Acting Currency Controller, said Thursday in a statement accompanying the ‘announcement.
“In addition to the $ 250 million civil fine that we are assessing against Wells Fargo, today’s action places limits on the bank’s future activities until the problems existing in mortgage service are adequately resolved, ”he continued.
The new ordinance will require “the bank to take broad and comprehensive corrective measures to improve the execution, risk management and oversight of the bank’s loss mitigation program,” the OCC said. The $ 250 million penalty will go to the US Treasury.
In a statement released Thursday, Wells Fargo simultaneously acknowledged the disciplinary action by the OCC and said a separate 2016 consent order imposed by the Consumer Financial Protection Bureau on Wells Fargo’s sales practices had expired, as of Wednesday.
“Building an appropriate risk and control infrastructure has been and remains Wells Fargo’s top priority,” Wells Fargo CEO Charlie Scharf said in the statement. “OCC’s actions today indicate the work we must continue to do to address important and long-standing gaps.”
Scharf’s mission is to reshape the bank since joining in 2019, overhauling its internal reporting structure to more closely control risks and promote accountability. The bank also sold its asset management and corporate trust activities, in an effort to reduce costs and focus on core businesses like consumer banking.
The 2016 CFPB consent order was issued against Wells Fargo after the bank was revealed to have opened millions of fraudulent accounts in a massive customer abuse scandal. The expiration of the order, Scharf said in the statement, was “indicative of the progress we are making.”
The bank remains subject to other restrictions imposed by federal regulators, including a 2018 asset cap imposed by the
The insider also detailed the sweeping transformation taking place in Wells Fargo’s management ranks as Scharf seeks to prove to regulators and customers that the bank has gone beyond the scandal. More than 90 senior executives have joined Wells Fargo outside of the bank since 2019.
“Our leadership team is fundamentally different today than it was a year and a half ago,” Scharf said on a conference call in May.