Wells Fargo is relieved of the remainder of a 2018 enforcement order from the Federal Reserve that, among other things, limited the bank’s growth and mandated removal of some of its board members, the agency said Thursday.
In a release, the Fed said it was terminating the eight-year-old enforcement action “following its determination that the bank had met all required conditions.”
The Fed noted that its 2018 order required the bank to demonstrate that improvements to its governance and risk management program made the program effective, and completed two third-party reviews of these improvements.
The agency also pointed out an asset cap on the bank imposed in 2018 was lifted in 2025, when Wells Fargo met the conditions for removal.
The enforcement action taken eight years ago grew out of what the Fed called then “recent and widespread consumer abuses and other compliance breakdowns.” Those stemmed from the bank’s auto-loan collateral insurance program and mortgage interest-rate lock program. The bank faced fines of $1 billion from the Consumer Financial Protection Bureau (CFPB) and the Office of the Comptroller of the Currency (OCC) and restitution. The CFPB ultimately ordered the bank to pay more than $2 billion in redress to consumers.
The consent orders issued by CFPB and OCC (and signed by Wells Fargo) stated that since 2005, Wells had a policy of force-placing collateral protection insurance on auto loans when borrowers did not purchase their own. For hundreds of thousands of customers, it continued to maintain those policies even after borrowers obtained their own coverage, the order stated.
The CFPB order stated that Wells also acknowledged that for at least 27,000 customers, the added costs of the force-placed insurance “could have contributed to a default that resulted in the repossession of their vehicle.”
Federal Reserve Board announces termination of enforcement action with Wells Fargo
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