Bank Settles Charges with OCC and CFPB for Risk Management Deficiencies

Wells Fargo Bank, N.A. ("Wells Fargo") agreed to pay a total of $1 billion to settle charges with the Office of the Comptroller of the Currency ("OCC") and the Consumer Financial Protection Bureau (collectively, "agencies") regarding its comprehensive risk management program and certain policies on home mortgage and auto loans.

According to the Orders, the charges arose from allegations that Wells Fargo failed to implement an effective "enterprise-wide compliance risk management program," which led to improper practices that affected their customers. The agencies stated that, due to supervisory and compliance deficiencies, Wells Fargo charged customers in error by (i) maintaining collateral protection insurance policies for automobile loan accounts that had already provided adequate insurance, and (ii) charging customers mortgage interest lock extension fees in circumstances which violated their policy.

The OCC Order also amended restrictions that had been placed on Wells Fargo in November 2016. The original restrictions removed Wells Fargo's definition as an "eligible bank" for "purposes of expedited treatment of certain applications." According to the Order, Wells Fargo will again be treated as an eligible bank and is no longer (i) required to notify the OCC of changes in upper management or (ii) subject to the limitation on "golden parachute payments."

Wells Fargo made no admissions in connection with the consent orders.