Banking giant Wells Fargo needs to improve its compliance with required improvements to its risk management program, according to a letter from the head of the Consumer Financial Protection Bureau.
“I am not satisfied with the bank’s progress to date and have instructed staff to take all appropriate actions to ensure the bank complies with the consent order and Federal consumer financial law,” she said. Kraninger and other regulators were responding to a request from Sen. Elizabeth Warren (D-Mass.) and Sen. Sherrod Brown (D-Ohio) for increased oversight of the bank.
“Scandal after scandal has shown that Wells Fargo has to be rebuilt from the ground up before regulators, Congress, and the American people can trust it again,” Warren said. “The OCC, the Fed, and the CFPB need to do their jobs and hold Wells Fargo accountable until the bank rights all wrongs, including making every single person they harmed whole.”
Wells Fargo has been plagued with legal issues since its unauthorized-account-opening scandal broke in 2016; two of its CEOs have left in that time, and it is currently in search of a permanent holder of the post.
Most recently, it was required to improve its risk management program as part of a consent order issued a year ago jointly by the CFPB and the OCC. The agencies collectively fined the bank $1 billion over its risk management practices and its administration of a mandatory insurance program related to its auto loans and in how it charged certain borrowers for mortgage interest rate-lock extensions. It was also required to issue restitution to affected consumers.
Kathy Kraninger said “all options are on the table” in making sure the bank meets required goals.
In a separate letter, Comptroller of the Currency Joseph Otting also pledged continued oversight of the bank’s compliance with various consent orders.
“We share your concerns regarding the progress of Wells Fargo toward meeting our regulatory expectations as set forth in the outstanding enforcement actions against bank,” Otting wrote. “The OCC is fully engaged and prepared to ensure Wells Fargo corrects the identified deficiencies, remediates identified harm to its customers, and operates in a safe and sound manner going forward.”
Federal Reserve Chair Jerome Powell also sent a letter assuring continued oversight of the bank.