EDITOR NOTE: Wells Fargo, the fourth-largest bank in the U.S., still can’t get its act together years after “Employees opened some 3.5 million phony accounts in customers’ names without their permission to artificially hit internal sales targets.” Even after paying $190 million in damages and being forced by the Fed to keep its assets below $1.95 trillion, the bank still hasn’t improved its governance and risk controls. Now, the Office of the Comptroller of the Currency and the Consumer Financial Protection Bureau are threatening further sanctions against Wells Fargo unless they start to show some real progress in this matter. The announcement of these further sanctions tanked the bank’s stock by 5.6%.
The Office of the Comptroller of the Currency (OCC) and the Consumer Financial Protection Bureau (CFPB) have signaled to the bank they are not satisfied with its progress, including the bank’s attempts to improve its governance and risk controls, the report said.
Wells Fargo’s stock fell 5.6% on the news.
Representatives from the OCC and the CFPB did not immediately respond to requests for comment. Wells Fargo declined to comment.
The bank, the fourth-largest in the United States, has been dogged by persistent costs and restrictions tied to its years-old sales practice scandals. Employees opened some 3.5 million phony accounts in customers’ names without their permission to artificially hit internal sales targets.
In 2016, Wells reached a $190 million settlement with the CFPB, the OCC and a Los Angeles prosecutor over the practice.
In 2018, the Federal Reserve ordered that Wells Fargo keep its assets below $1.95 trillion until it had improved governance and risk controls, and it entered into a sweeping consent order with the OCC related to selling of mortgage and auto-insurance products.
The bank has sought more time to resolve the issues raised by the consent orders, according to Bloomberg.
The asset cap has constrained the bank’s ability to make loans or grow, its executives said in July. Further sanctions could hurt the bank’s growth prospects.
It was not clear when regulators might proceed, Bloomberg reported.
Original post from Up News