The Office of the Comptroller of the Currency has announced Wells Fargo will pay a $250 million fine following a federal investigation into mortgage loan modification practices.
As reported by Inman, Wells Fargo had failed to establish an effective home lending loss mitigation program. Additionally, the OCC found Wells Fargo made errors when offering loan modifications, and that the financial institution violated the terms of a 2018 consent order that required the bank to develop and implement “an effective enterprise-wide compliance risk management program,” after uncovering problematic practices in its auto lending business.
“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,” Acting Comptroller of the Currency Michael J. Hsu said in a statement. “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.”
As noted in the OCC’s report, as shared by Inman, in offering loan modifications to borrowers, Wells Fargo has made mistakes that it has failed to “detect, prevent, and quantify” in a timely manner, impairing the bank’s ability to “fully and timely remediate harmed customers.”
Wells Fargo CEO Charlie Scharf said via statement that, “Building an appropriate risk and control infrastructure has been and remains Wells Fargo’s top priority.” Scharf also said that the OCC’s actions “point to work we must continue to do to address significant, longstanding deficiencies.”