Wells Fargo could face additional sanctions due to auto insurance practices
The bank may be facing even more penalties from a federal regulator due to mortgage and insurance scandals.
Wells Fargo & Co. may already have faced penalties for its mortgage and auto insurance practices but they don’t seem to be over yet. A federal regulator may be applying more sanctions to the bank as a result of practices that have come to light over the last few months.
Among the car insurance practices was one that forced car loan customers to pay for unnecessary coverage.
Last week, the Wall Street Journal reported that the Office of the Comptroller of the Currency (OCC) is considering a new formal penalty for the bank’s dubious auto insurance practices. The comptroller is one of the regulators that issued a fine to Wells Fargo for its fraudulent bank account creation practices last year. Now, it is considering a formal reprimand for this year’s discovery of the unneeded car insurance willingly forced upon the bank’s loan customers.
The report indicated that unnamed sources familiar with this issue had said the OCC could potentially issue a cease and desist order. That is a form of regulatory action which would force a financial institution to halt certain among its practices and correct those practices appropriately.
The type of order expected for the auto insurance practices also typically involves a large fine.
Last year, the fraudulent bank account scandal brought with it a $185 million settlement from Wells Fargo to federal regulators and the L.A. city attorney’s office. Of that total, $35 million was a fine applied by the OCC in a cease and desist order.
An OCC spokesperson declined the opportunity to discuss the topic, explaining that the regulator does not comment on “supervisory matters pertaining to specific banks.”
Similarly, a Wells Fargo spokesperson, Catherine Pulley, said she would also be declining the opportunity to comment on any of the specific interactions the bank has with its regulators. “While there is still work to be done, Wells Fargo is dedicated to making things right, fixing the problems, and building a better bank,” said Pulley. She added that the bank is already making “critical changes” across in order to be able to heal the trust among their customers and within their teams.