Reports: Well Fargo To Be Fined $1 Billion
RACHEL MARTIN, HOST:
As early as today, Wells Fargo could be facing a new fine of up to a billion dollars for a variety of infractions against its customers. NPR's Jim Zarroli has details. And we should note - Wells Fargo is a financial supporter of some NPR programming.
JIM ZARROLI, BYLINE: In recent years, Wells Fargo has acknowledged that it set up some 3.5 million credit cards and banking accounts for its customers without their knowledge. And state and federal officials have accused it of other misdeeds involving auto loans and mortgages. Mike Calhoun is president of the Center for Responsible Lending. He says the bank has failed to stop many of these abuses from taking place.
MIKE CALHOUN: I think that is perceived and I think Wells has acknowledged that those are systemic failures, not just one-off problems.
ZARROLI: The bank has already paid fines amounting to nearly $200 million over its sales practices. Its chief executive was forced to resign. And earlier this year, the Federal Reserve barred the bank from adding to its assets until it reformed its internal risk-control systems. The Fed said the bank was guilty of widespread consumer abuses. Last week, the bank said it was negotiating with federal officials and expected to pay a fine of up to a billion dollars. Karen Shaw Petrou is managing partner at Federal Financial Analytics.
KAREN SHAW PETROU: It's real money. It's real money they can afford. It's real money that reduces earnings in the quarter But doesn't eliminate make them or otherwise cause so much damage.
ZARROLI: The fine is being levied by the Office of the Comptroller of the Currency, which regulates banks, and by the Consumer Financial Protection Bureau, which was created as part of the Dodd-Frank financial overhaul. It's the first major enforcement action against a bank by President Trump. The president has sometimes said he wants to roll back bank regulations, and he has appointed regulators viewed as friendly to the banking industry. But he has also criticized Wells Fargo, saying he was willing to impose severe penalties when banks are caught cheating. Jim Zarroli, NPR News, New York.
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