Wells Fargo hit with a $250 million penalty cease and desist order

WASHINGTON—The Office of the Comptroller of the Currency (OCC) today assessed a $250 million civil money penalty against Wells Fargo Bank, N.A, of Sioux Falls, S.D., based on the bank’s unsafe or unsound practices related to deficiencies in its home lending loss mitigation program and violations of the 2018 Compliance Consent Order.

“Wells Fargo has not met the requirements of the OCC’s 2018 action against the bank. This is unacceptable,” said Acting Comptroller of the Currency Michael J. Hsu. “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 OCC also issued a Cease and Desist Order against the bank based on the bank’s failure to establish an effective home lending loss mitigation program. The order requires the bank to take broad and comprehensive corrective actions to improve the execution, risk management, and oversight of the bank’s loss mitigation program. The order restricts the bank, while the order is effective, from acquiring certain third-party residential mortgage servicing and requires the bank to 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.

The OCC penalty will be paid to the Treasury Department

“Building an appropriate risk and control infrastructure has been and remains Wells Fargo’s top priority,” said Charlie Scharf, Wells Fargo’s CEO. “The OCC’s actions today point to work we must continue to do to address significant, longstanding deficiencies.”

Scharf continued: “As I’ve said over the past year, our work to build the right foundation for a company of our size and complexity will not follow a straight line. We are managing multiple issues concurrently, and progress will come alongside setbacks. That said, we believe we’re making significant progress, the work required is clear, and I remain confident in our ability to complete it.”