Trump Vows 'Severe' Penalties Against Wells Fargo

Leah Barkoukis
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Posted: Dec 08, 2017 1:30 PM
Trump Vows 'Severe' Penalties Against Wells Fargo

President Trump on Friday explained what repercussions Wells Fargo could face as a result of customer abuses. 

“Fines and penalties against Wells Fargo Bank for their bad acts against their customers and others will not be dropped, as has incorrectly been reported, but will be pursued and, if anything, substantially increased. I will cut Regs but make penalties severe when caught cheating!” he said on Twitter.

Trump appears to be referencing a Reuters story published Thursday that reports Wells Fargo sanctions are “on ice” under Mick Mulvaney, the new acting head of the Consumer Financial Protection Bureau, who is reviewing whether to proceed with a proposal to fine the bank for its mortgage lending abuses. 

The San Francisco-based bank said in October that it would refund homebuyers who were wrongly charged fees to secure low mortgage rates - a black mark against a lender which has already been roiled by scandal over its treatment of customers.

The Consumer Financial Protection Bureau (CFPB) had been investigating the mortgage issue since early this year, said one current and two former officials. The agency accepted an internal review from Wells Fargo and set settlement terms in early November, said the sources, who were not authorized to speak about internal discussions.

But that matter and roughly a dozen others are in question now that Mick Mulvaney, the agency chief tapped by President Donald Trump, has said he is reviewing the CFPB’s prior work.

Richard Cordray, the former CFPB director who initiated the Wells Fargo action, approved the terms of a possible settlement before stepping down, said the sources.

That proposal envisions a Wells Fargo payout of tens of millions of dollars but likely short of the record, $100 million payout the bank made to the CFPB last year over a phony accounts scandal, sources said.

More than 100,000 borrowers paid the fee to lock in a fixed-rate loan between September 2013 and February 2017, the bank has said, adding it believes a “substantial number” of those charges were appropriate. (Reuters)

Nowhere did the report claim the proposal had been dropped, however.