Wells Fargo could pay $1 billion to settle federal probes

Wells Fargo could pay $1 billion to settle federal probes
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Wells Fargo could pay up to $1 billion in fines to two federal regulators to settle claims they inappropriately charged customers for unnecessary or unwanted banking and insurance products, the bank revealed Friday.

The San Francisco-based bank said in its first quarter earnings report that its preparing to pay a fine to the Consumer Financial Protection Bureau (CFPB) and Office of the Comptroller of the Currency (OCC).

The CFPB and OCC have been investigating Wells Fargo over reports that the bank had charged customers for auto insurance products they did not need, along with unnecessary fees to lock in mortgage interest rates.

Wells Fargo cautioned that the bank is “unable to predict final resolution of the CFPB/OCC matter and cannot reasonably estimate our related loss contingency.”

Tim Sloan, Wells Fargo CEO, said, “I’m confident that our outstanding team will continue to transform Wells Fargo into a better, stronger company; however, we recognize that it will take time to put all of our challenges behind us.”

The OCC declined to comment. The CFPB did not immediately respond to a request for comment. 

The CFPB and OCC settlement is unrelated to the federal probes of Wells Fargo’s opening of as many as 3.5 million accounts for customers without their authorization while charging fees for the unwanted services.

The Federal Reserve in January imposed strict growth restrictions and targeted four Wells Fargo board members for removal in response, an unprecedented action against a bank. The CFPB in September 2016 fined Wells Fargo $100 million for the unauthorized account openings.

Wells Fargo reported $5.9 billion in income during the first quarter of 2018, up from $5.6 billion from the same time in 2017.