WASHINGTON, D.C. – Today, the Office of the Comptroller of the Currency (OCC) and the Consumer Financial Protection Bureau (CFPB) issued a $1 billion fine against Wells Fargo, ordered the bank to make restitution to customers harmed by its practices, and required certain management changes. The enforcement action was triggered by the bank’s auto finance practices over recent years that led to an estimated 800,000 consumers pushed into auto insurance they did not need, an estimated 274,000 customers being pushed into delinquency, and wrongful vehicle repossessions estimated to be around 25,000. The enforcement action was also triggered by Wells wrongly charging thousands of its mortgage borrowers.
Center for Responsible Lending (CRL) Executive Vice President Debbie Goldstein issued the following statement:
This enforcement action comes after Wells Fargo improperly charged hundreds of thousands of its customers. This was harm to consumers caused by systemic failure. Wells Fargo has in recent years acknowledged systemic failures, and it is our hope that their reforms will continue so consumers are protected from further abuse.
Wells Fargo has a lot of work to do to regain the trust of the people who have put their financial well-being into the bank’s hands. As part of this process, we hope its leadership will also reevaluate some of its other practices, including abusive overdraft fees and forced arbitration.
While we will evaluate the specifics of today’s enforcement action, it is clear that action by the OCC and CFPB here was certainly warranted and is welcomed.
At the same time, we are warning against the OCC and CFPB declaring ‘mission accomplished’ in consumer protection. There have been worrying signs of lax regulation by these agencies, especially related to payday loans, which regularly exploit low-wealth Americans. Just today, there are reports that the CFPB, under Mick Mulvaney, is letting yet another payday lender off the hook. The OCC and CFPB must vigorously challenge and work to prevent misconduct by all financial actors in their jurisdiction.
It is also important that financial regulators have independence from politics, so that they can focus on their oversight mission.
For more information, or to arrange an interview with a CRL spokesperson on this issue, please contact Matthew Kravitz at email@example.com or 202-349-1859.