President Donald Trump has apparently kept his promise that the Consumer Financial Protection Bureau, under the leadership of OMB Director Mick Mulvaney, isn’t planning on dropping its pursuit of penalties against Wells Fargo for overcharging mortgage borrowers and forcing customers to buy auto insurance they didn’t need.
According to Reuters, the CFPB is reportedly planning to levy a record fine against the bank that could exceed several hundred million dollars – and possibly be as high as $1 billion, per three people with knowledge of the agency’s plans. If this comes to pass, it would be the largest fine ever levied by the CFPB. The agency previously fined Wells Fargo $100 million in September 2016. That is currently its largest ever fine.
The penalty would be the first issued by Mulvaney, who was criticized for dropping some enforcement actions when he took over from the agency’s inaugural director, Richard Cordray.
These penalties would follow a separate punishment levied by the Federal Reserve earlier this year that would freeze the bank’s balance sheet, forcing it to “stop growing.” The bank has endured a flurry of downgrades as sell-side analysts cut their ratings after the Fed’s decision.
The bank is also embroiled in another criminal investigation by a California prosecutor related to purported overcharging by its FX traders.
Wells Fargo shares remained higher on the day after the news.