NEW YORK (CNN) – Two federal regulators are fining Wells Fargo $1 billion for forcing customers into car insurance and charging mortgage borrowers unfair fees.
The penalty was announced Friday by the Consumer Financial Protection Bureau and the Office of the Comptroller of the Currency.READ MORE: Philadelphia Weather: How Much Snow Will Major Nor'easter Dump On Your Area?
It is the harshest action taken by the Trump administration against a Wall Street bank.
Wells Fargo apologized last year for charging as many as 570,000 clients for car insurance they didn’t need.
An internal review by Wells Fargo found that about 20,000 of those customers may have defaulted on their car loans and had their vehicles repossessed in part because of those unnecessary insurance costs.
In October, the bank revealed that some mortgage borrowers were inappropriately charged for missing a deadline to lock in promised interest rates, even though the delays were Wells Fargo’s fault.
The two regulators provided a roadmap for Wells to fix practices that led to consumer abuses, including the creation of a compliance committee to oversee the process.
The bank will now be required to update regulators on its progress. Wells must also show how it plans to identify customers hurt by its misconduct and explain plans to compensate them.CBS3 Mysteries: What Happened To Celina Mays, 12 Years Old And Pregnant, 26 Years Ago?
Regulators said the bank had already begun to take steps to fix the wrongdoing. CEO Timothy Sloan said the scandal-plagued bank has made progress toward “delivering on our promise to review all of our practices and make things right for our customers.”
“Our customers deserve only the best from Wells Fargo, and we are committed to delivering that,” he said following the penalty announcement.
Wells Fargo was fined $500 million by each agency. It will need to pay its penalty to the consumer watchdog within 10 days. The OCC did not specify a payment deadline.
Such a large fine is noteworthy for the CFPB under Mick Mulvaney, the acting director appointed by President Trump.
As a congressman, he called for the bureau’s destruction. And under his leadership, the bureau has delayed payday-loan rules, dropped lawsuits against payday lenders and stripped a fair-lending division of its enforcement powers.
He told a House hearing this week that the bureau has not launched any enforcement actions since he took over last fall.
Other regulators have come down hard on Wells, too. In February, the Federal Reserve handed down unprecedented punishment against Wells Fargo for what it called “widespread consumer abuses,” including its creation of as many as 3.5 million fake customer accounts.
Under that penalty, Wells Fargo won’t be allowed to get any bigger than it was at the end of last year – $2 trillion in assets – until the Fed is satisfied that it has cleaned up its act.MORE NEWS: Major Preparations Underway At Jersey Shore, Philadelphia Region Ahead Of Winter Storm
The-CNN-Wire ™ & © 2018 Cable News Network, Inc., a Time Warner Company. All rights reserved.