In letters to Senators Elizabeth Warren (D-Mass) and Sherrod Brown (D-Ohio) the Fed, OCC, and CFPB express doubts that Wells Fargo is prepared to ensure its compliance with consent orders.
Senators Elizabeth Warren (D-Mass) and Sherrod Brown (D-Ohio) released letters from the Federal Reserve Board, Office of the Comptroller of the Currency, and Consumer Financial Protection Bureau stating that Wells Fargo has not satisfied its obligations under existing consent orders, which require the bank to remediate customers harmed by its wrongdoing and impose reforms to end Wells Fargo's unlawful activity. The letters are in response to inquiries the senators sent the regulators in March 2019 (see Banking and Finance Law Daily, March 25, 2019).
In their letters to the regulators, Warren and Brown expressed concern about Wells Fargo's apparent unwillingness to compensate customers harmed by the bank's illegal auto-lending practices, despite an obligation to do so under its settlement with the OCC and CFPB, and urged the agencies to use their enforcement tools to remove then-CEO Tim Sloan. The senators' letter to the Fed also cited a recent Securities and Exchange Commission settlement fining the bank $17.4 million for overcharging retail mutual fund investors in 2014-2015, more evidence, the senators contend, of illegal activity at the bank. The senators added that, although Wells Fargo announced Sloan's retirement last month, it "must take additional actions to address its history of misconduct."
In his letter to the senators, Fed Chairman Jerome Powell said, "As I have previously stated, we expect Wells Fargo to comprehensively address its weaknesses. Federal Reserve staff will continue to engage with the firm, including its new leadership, to ensure it makes appropriate progress. I want to reiterate that we do not intend to lift the asset cap imposed on Wells Fargo until remedies to address the risk management breakdowns that the Order was meant to address have been adopted and implemented to our satisfaction."
Comptroller of the Currency Joseph Otting wrote, "We share your concerns regarding the progress of Wells Fargo toward meeting our regulatory expectations as set forth in the outstanding enforcement actions against bank … OCC supervision staff members continue to monitor the bank's work to remediate deficiencies identified in our April 2018 order as well as orders issued in September 2016 directly related to unsafe and unsound practices and November 2015 related to Bank Secrecy Act Compliance. The OCC is fully engaged and prepared to ensure Wells Fargo corrects the identified deficiencies, remediates identified harm to its customers, and operates in a safe and sound manner going forward."
"I can tell you that while the Bureau is working with Wells Fargo to ensure its compliance with the consent order, I am not satisfied with the Bank's progress to date and have instructed staff to take all appropriate actions to ensure the Bank complies with the consent order and Federal consumer financial law," wrote CFPB Director Kathy Kraninger. "Broadly speaking, I consider all options on the table for enforcing Bureau consent orders."
In response to the agencies' letters, Warren stated that "Scandal after scandal has shown that Wells Fargo has to be rebuilt from the ground up before regulators, Congress, and the American people can trust it again. The OCC, the Fed, and the CFPB need to do their jobs and hold Wells Fargo accountable until the bank rights all wrongs, including making every single person they harmed whole."
Brown added, "Of course Wells Fargo hasn't done enough to clean up its act. Trump's regulators need to stop acting like lapdogs for the banking industry and start being the watchdogs consumers are counting on."
Companies: Wells Fargo
MainStory: TopStory CFPB CrimesOffenses EnforcementActions FederalReserveSystem Loans OversightInvestigations SecuritiesDerivatives UDAAP
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