One of the top U.S. Banking regulators fined Wells Fargo $250 million. It also placed new restrictions on the bank’s business. This was done after concluding that there were shortcomings in compensating the customers. Initially, the bank had harmed the customers in some way or the other.
The Currency Comptroller’s office said that the bank failed to meet a 2018 consent order requirements. This order asked the bank to pay back the customers who were charged excessively with improper fees. The acting Comptroller, Michael Hsu, issued a statement telling the same.
Insufficient Efforts by Wells Fargo: Deficiencies In Compensation
The OCC cited that the efforts made by the bank to pay the customers were insufficient. Therefore, it was one with some ‘significant deficiencies. These customers harmed in some way or the other did not get good compensation.
Owing to the order, Wells Fargo had agreed to a joint $1 billion settlement in 2018. The regulators did the settlement. Later, they found that the bank had wrongly made insurance covers on hundreds and thousands of drivers. Also, the bank routinely assessed excessive and improper fees on home buyers. For keeping the earlier consent order, the bank was ordered to identify these “wronged customers”. Then compensate them for restitution.
Wells Fargo CEO Charles Scharf made a statement. He said that the new penalty makes us realize that more work needs to address the longstanding deficiencies. He also said that they would work harder to build a proper foundation for a company of the size of Wells Fargo.
This penalty marks a new hit to the bank. The bank began addressing customer abuses spreading extensively around five years ago.
The previous year, Wells Fargo agreed to pay $3 billion to settle civil and criminal probes into the firm’s fraudulent sales practices. Earlier, the OCC has fined eight former executives around $58 million!
