The OCC said lender has failed to fix issues first identified in 2018.
Regulators fined Wells Fargo. $250 million for lack of progress in addressing longstanding issues in its mortgage business.
The Office of the Comptroller of the Currency, one of the bank’s top regulators, said the lender had failed to fix problems itfirst identified in a 2018 order, in which the bank was found tohave harmed home lending customers. That order asked the bank to offer restitution to customers and improve risk-and-compliance management practices.
The newest penalty is a setback for Wells Fargo five years after the bank first became embroiled in scandal for creating perhaps millions of fake customer bank accounts. Chief Executive Charles Scharf has spent the last two years trying to make nice with regulators, but a long list of penalties remain in place. The bank indicated in recent regulatory filings that its overseers were losing patience.
“Wells Fargo has not met the requirements of the OCC’s 2018 action against the bank. This is unacceptable,” said Acting Comptroller of the Currency Michael J. Hsu in a statement.
The regulatory rebuke specifically faults the bank for failing to develop a program for customers to avoid losing their homes, such as through loan modifications. That has caused errors that harmed borrowers, the OCC said. The penalty asks the bank to fix that program and improve its risk-management systems. It also bars the bank from acquiring mortgage servicing from other lenders.
Mr. Scharf has long indicated that the bank’s transformation will take multiple years, and so far has included an overhaul of its business lines and leadership team.
“Progress will come alongside setbacks,” he said. “That said, we believe we’re making significant progress, the work required is clear, and I remain confident in our ability to complete it.”
The bank said that, as one example of its progress, the Consumer Financial Protection Bureau allowed its initial penalty for the fake accounts to expire on Wednesday, five years after it was first put in place.