A $250 civil money penalty and operational limits were imposed on Wells Fargo Bank (Sioux Falls, S.D.) Thursday under consent orders with the Office of the Comptroller of the Currency (OCC), which cited the bank over home lending loss mitigation deficiencies and violations of a 2018 consent compliance order.
“Wells Fargo has not met the requirements of the OCC’s 2018 action against the bank. This is unacceptable,” Acting Comptroller of the Currency Michael Hsu said in a statement. “In addition to the $250 million civil money penalty that we are assessing against Wells Fargo, today’s action puts limits on the bank’s future activities until existing problems in mortgage servicing are adequately addressed. The OCC will continue to use all the tools at our disposal, including business restrictions, to ensure that national banks address problems in a timely manner, treat customers fairly, and operate in a safe and sound manner.”
The agency, in its cease-and-desist order, said that:
- Wells Fargo Bank has failed to fully implement and maintain adequate loss mitigation practices and related Independent risk management practices commensurate with the bank’s size, complexity, and risk profile.
- Its loss mitigation decisioning tools (applications and end-user computing tools) and operational deficiencies have caused errors in the bank’s loss mitigation processes and controls that negatively affected borrowers.
- Inadequate controls, insufficient independent oversight, and ineffective governance related to loss mitigation activities have caused the bank’s failure to timely detect, prevent, and quantify inaccurate loan modification decisions and impaired the bank’s ability to fully and timely remediate harmed customers.
- Its internal audit coverage of loss mitigation activities are deficient and have failed to include all aspects of previously identified loan modification decision issues.
The OCC also said that while the order remains in effect, Wells Fargo Bank is restricted from acquiring certain third-party residential mortgage servicing; and must ensure that borrowers are not transferred out of the bank’s loan servicing portfolio until remediation is provided, except as required by an investor pursuant to a contractual right.
OCC Assesses $250 Million Civil Money Penalty, Issues Cease and Desist Order Against Wells Fargo