NEW YORK: Wells Fargo will pay $1 billion in fines to address deficiencies identified by regulators in its mortgage and auto loan businesses, US officials said Friday.
The big US bank, which has been under fire from regulators and shareholders in the wake of a 2016 fake accounts scandal, will pay the fines to resolve actions brought by the Office of the Comptroller of the Currency and the Bureau of Consumer Financial Protection.
The OCC found that Wells Fargo improperly charged customers in its auto loan program and in some cases, "improperly repossessed" vehicles from borrowers who were unable to pay, said a consent order from the agency.
The OCC also found that Wells Fargo had improperly charged some customers when mortgages failed to be secured by the "lock" deadline for guaranteeing an interest rate, even in cases where the bank itself was responsible for the missed deadlines.
Wells Fargo was fined "given the severity of the deficiencies and violations of law, the financial harm to consumers, and the bank's failure to correct the deficiencies and violations in a timely manner," the OCC said in a news release.
The penalty is the latest regulatory problem to befall Wells Fargo, which also came under fire from investors and lawmakers over a fake accounts scandal. The Federal Reserve, in an unprecedented move, in February ordered the bank to halt its expansion until it improves governance, following "persistent misconduct."
Shares of Wells Fargo rose 1.1 percent to $52.11 in early trading Friday.