American regulators are getting ready to apply penalties to the financial giant for its illegal actions.
U.S. regulators are preparing to apply the Wells Fargo sanctions the industry has known would be coming. The bank forced over half a million drivers to pay for auto insurance they didn’t need. The official repercussions are now arriving.
The financial industry has been waiting to see how this Wells Fargo scandal would play out.
The Wells Fargo sanctions are not a surprise to anyone. After the scandal came out, it was only a matter of time before regulators took action to penalize the company for what happened.
In July 2017, Wells Fargo identified a problem it found with its auto lending practices. It pointed to a third party vendor for having wrongly applied additional car insurance policies onto its auto loan customers.
The Wells Fargo sanctions were applied because the bank had been profiting from the illegal actions.
The report on the new sanctions and the reason behind them was made by Reuters. That media outlet quoted people with knowledge of the matter but who did not have authorization to speak publicly about it.
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These latest penalties are only the most recent among the many punishments Wells Fargo has faced for several scandals over the last short while. In this case, hundreds of thousands of drivers were paying thousands of dollars in unnecessary auto insurance premiums.
In at least 25,000 cases, the excessive expenses forced borrowers to fail to make payments and their vehicles were repossessed. Furthermore, many drivers experienced harm to their credit scores. The financial giant has been working to help repair the credit histories of the affected borrowers.
The Office of the Comptroller of the Currency (OCC) is the primary Wells Fargo regulator. The OCC has been investigating the scandal. It is attempting to determine who among the bank’s executives was aware of the excessive payments. They are also trying to find out if the auto insurance premiums could have been stopped earlier than they were, said the Reuters source.
The bank does not comment on its regulatory as a policy. This includes the Wells Fargo sanctions, said Catherine Pulley, a spokesperson for the bank.