WASHINGTON— The Office of the Comptroller of the Currency (OCC) today assessed a $35 million civil money penalty against Wells Fargo Bank, N.A., and ordered the bank to make restitution to customers who were harmed by the bank’s unsafe or unsound sales practices.
The sales practices the OCC found to be unsafe or unsound included the unauthorized opening of deposit or credit card accounts and the transfer of funds from authorized, existing accounts to unauthorized accounts. The $35 million civil money penalty reflects a number of factors, including the bank’s failure to develop and implement an effective enterprise risk management program to detect and prevent the unsafe or unsound sales practices, and the scope and duration of the practices. The penalty will be paid to the U.S. Treasury.
Customers eligible for restitution include those who were financially harmed as a result of the unsafe or unsound sales practices. The OCC order also requires the bank to take corrective action to establish an enterprise-wide sales practices risk management and oversight program to detect and prevent unsafe or unsound sales practices.
The OCC is taking this action in coordination with the Consumer Financial Protection Bureau (CFPB) and the Los Angeles City Attorney. Restitution payments made by the bank to customers pursuant to the OCC’s order will also satisfy identical obligations required by the CFPB and the Los Angeles City Attorney.
Wells Fargo Issues Statement on Agreements Related to Sales Practices:
Wells Fargo Bank, N.A., a subsidiary of Wells Fargo & Company (NYSE:WFC), reached agreements with the Consumer Financial Protection Bureau, the Office of the Comptroller of the Currency, and the Office of the Los Angeles City Attorney, regarding allegations that some of its retail customers received products and services they did not request.
The amount of the settlements, which Wells Fargo had fully accrued for at June 30, 2016, totaled $185 million, plus $5 million in customer remediation.
The company issued the following statement related to today’s news:
“Wells Fargo reached these agreements consistent with our commitment to customers and in the interest of putting this matter behind us. Wells Fargo is committed to putting our customers’ interests first 100 percent of the time, and we regret and take responsibility for any instances where customers may have received a product that they did not request.
Our commitment to addressing the concerns covered by these agreements has included:
An extensive review by a third party consulting firm going back into 2011, which we completed prior to these settlements. The review included consumer and small business retail banking deposit accounts and unsecured credit cards opened during the period reviewed.
As a result of this review, $2.6 million has been refunded to customers for any fees associated with products customers received that they may not have requested. Accounts refunded represented a fraction of one percent of the accounts reviewed, and refunds averaged $25.
Disciplinary actions, including terminations of managers and team members who acted counter to our values.
Investments in enhanced team-member training and monitoring and controls.
Strengthened performance measures that are tied to customer satisfaction, loyalty and ethics.
Sending customers a confirming email within one hour of opening any deposit account, and sending an application acknowledgement and decision status letter after submitting an application for a credit card.”
In addition, as noted in a message emailed to all Wells Fargo team members today, the company said “Our entire culture is centered on doing what is right for our customers. However, at Wells Fargo, when we make mistakes, we are open about it, we take responsibility, and we take action. Today’s agreements are consistent with these beliefs.” Customers can visit wellsfargo.com/commitment to view their accounts, and for information about this announcement.
About Wells Fargo
Wells Fargo & Company (NYSE: WFC) is a diversified, community-based financial services company with $1.9 trillion in assets. Founded in 1852 and headquartered in San Francisco, Wells Fargo provides banking, insurance, investments, mortgage, and consumer and commercial finance through more than 8,600 locations, 13,000 ATMs, the internet (wellsfargo.com) and mobile banking, and has offices in 36 countries and territories to support customers who conduct business in the global economy. With approximately 268,000 team members, Wells Fargo serves one in three households in the United States. Wells Fargo & Company was ranked No. 27 on Fortune’s 2016 rankings of America’s largest corporations. Wells Fargo’s vision is to satisfy our customers’ financial needs and help them succeed financially. Wells Fargo perspectives are also available at Wells Fargo Blogs and Wells Fargo Stories.
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