Wells Fargo to pay $1B in fines over customer practices

By Ovunc Kutlu

NEW YORK (AA) - American banking giant Wells Fargo has agreed to pay $1 billion in fines over its auto loans and mortgage practices that harmed its customers, the Consumer Financial Protection Bureau (CFPB) said in a statement Friday.

CFPB said Wells Fargo administered a mandatory insurance program related to its auto loans, and charged its customers for mortgage interest rate-lock extensions, both of which violated the U.S.' Consumer Financial Protection Act.

In addition to the fine, Wells Fargo will also remediate its harmed consumers, the CFPB said.

The settlement amount is a record for the CFPB and the toughest action taken by the President Donald Trump administration against an American bank so far.

Wells Fargo's recent activities adds more issues to the institution after it was revealed in 2016 that the bank opened millions of fake accounts without the knowledge of its customers and applied for 500,000 unauthorized credit card accounts to boost sales figures and meet sales targets.

The CFPB fined Wells Fargo in 2017 for nearly $200 million for those practices that dated back to 2011, while the bank fired 5,300 employees and then-Chief Executive Officer John Stumpf was forced to retire.

Shortly after the CFPB announcement on Friday, Wells Fargo President and CEO Timothy J. Sloan said in a statement that the bank is committed to work with the U.S. regulators for accountability and transparency.

Wells Fargo shares were trading with a 2.1 percent gain on the U.S. stock market at 1015 ET (1715 GMT).

The bank said last Friday its net income in the first quarter of 2018 rose 5.5 percent to $5.94 billion, but revenue fell 1.8 percent to $21.9 billion, compared with same period a year ago.