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BUSINESS Saturday 21 april 2018
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Wells Fargo to pay $1B for mortgage, auto lending abuses

By KEN SWEET go into the CFPB’s civil pen- pursued and, if anything,
AP Business Writer alties fund, which is used to substantially increased. I
NEW YORK (AP) — Wells help consumers who might will cut Regs but make pen-
Fargo will pay $1 billion to have been impacted in alties severe when caught
federal regulators to settle other cases. But zero dol- cheating!,” Trump wrote on
charges tied to its mort- lars of either penalty is go- Twitter back in December.
gage and auto lending ing directly to Wells Fargo’s The abuses being ad-
business, the latest chapter victims. dressed Friday are not tied
in years-long, wide-ranging The bank has already been directly to Wells Fargo’s
scandal at the banking gi- reimbursing customers in its well-known sales practices
ant. However, it appears auto and mortgage busi- scandal, where the bank
that none of the $1 billion nesses for these abuses. admitted its employees
will go directly to the victims Wells Fargo has been re- opened as much as 3.5 mil-
of Wells Fargo’s abuses. funding auto loan custom- lion bank and credit card
In a settlement announced ers since July and been accounts without getting
Friday, Wells will pay $500 This Friday, Aug. 11, 2017, file photo shows a sign at a Wells Far- mailing refund checks to customers’ authorization.
million to the Office of the go bank location in Philadelphia. impacted mortgage cus- But they do involve signifi-
Comptroller of the Curren- Associated Press tomers since December. cant parts of the bank’s
cy, its main national bank In a statement, the OCC go’s business. The bank will On Friday, Wells Fargo ad- businesses: auto lending
regulator, as well as a net said it imposed such a large need to come with a risk justed its previously report- and mortgages.
$500 million to the Con- fine against Wells “given management plan to be ed first-quarter earnings Last summer Wells Fargo
sumer Financial Protection the severity of the defi- approved by bank regula- to reflect the penalty. The admitted that hundreds of
Bureau. ciencies and violations of tors, and get approval from nation’s third-largest bank thousands of its auto loan
The action by the CFPB is law, the financial harm to bank regulators before hir- now says it made $4.7 bil- customers had been sold
notable because it is the consumers, and the bank’s ing senior employees. lion in the first 90 days of auto insurance that they
first penalty imposed by failure to correct the defi- “While we have more work the year, down from $5.46 did not want or need. In
the bureau under Mick ciencies and violations in a to do, these orders affirm billion in the same period thousands of cases, cus-
Mulvaney, who President timely manner.” that we share the same a year earlier. While banks tomers who could not af-
Trump appointed to take The fine against San Fran- priorities with our regulators have benefited from looser ford the combined auto
over the consumer watch- cisco-based Wells Fargo and that we are committed regulations and lower tax- loan and extra insurance
dog agency in late No- had been expected. The to working with them as we es under President Trump, payment fell behind on
vember. The $500 million company disclosed last deliver our commitments Wells Fargo has been their payments and had
is also the largest penalty week that it was in discus- with focus, accountability, called out specifically their cars repossessed.
imposed by the CFPB in its sions with federal authorities and transparency,” said by Trump as a bank that In a separate case, Wells
history, the previous being over a possible settlement Wells Fargo Chief Executive needed to be punished Fargo also admitted that
a $100 million penalty also related to its mortgage and Tim Sloan in a statement. for its bad behavior. “Fines thousands of customers
against Wells Fargo, and auto lending businesses, The $500 million paid to the and penalties against Wells had to pay unnecessary
matches the largest fine and that the fine could be Comptroller of the Curren- Fargo Bank for their bad fees in order to lock in their
ever handed out by the as much as $1 billion. cy will be paid directly to acts against their custom- interest rates on their home
Comptroller of the Curren- The settlement also con- the U.S. Treasury, accord- ers and others will not be mortgages. Wells Fargo is
cy, which fined HSBC $500 tains other requirements ing to the order. The $500 dropped, as has incorrectly the nation’s largest mort-
million in 2012. that would restrict Wells Far- million paid to the CFPB will been reported, but will be gage lender.q

Slumping tech companies

weigh on U.S. stocks

By ALEX VEIGA est rates, that sort of takes Bond prices continued to
AP Business Writer some wind out of the sails slide as bond yields rose.
A steep slide in technol- for equity markets, at least The yield on the 10-year
ogy companies weighed short-term,” said Edward Treasury rose to 2.96 per-
on U.S. stocks Friday, pull- Campbell, senior portfolio cent.
ing the market lower for the manager at QMA, a busi- That’s up from 2.91 per-
second day in a row. ness unit of PGIM. cent late Thursday and the
Losses among retailers, The S&P 500 index fell 22.99 highest level since January
packaged food and bev- points, or 0.9 percent, to 2014.
erage makers and other 2,670.14. The pickup in bond yields In this April 5, 2018, file photo, an NYSE logo adorns the entrance
consumer goods compa- The Dow Jones industrial helped drive bank shares to the trading floor the New York Stock Exchange. The U.S. stock
nies also helped weigh average slid 201.95 points, higher. When bond yields market opens at 9:30 a.m. EDT on Friday, April 20.
down the market. Banks or 0.8 percent, to 24,462.94. rise, they drive up interest Associated Press
rose as bond yields contin- The Nasdaq composite lost rates on mortgages and to the sector’s losses for the sumer-focused companies.
ued to climb, reflecting in- 91.93 points, or 1.3 percent, other loans, which can week. It’s still up 4.4 percent The struggling toy maker
creasing investor concerns to 7,146.13. The Russell 2000 translate into bigger profits this year. Apple led the sec- slid 3.6 percent to $12.96
of higher inflation in the index of smaller-company for banks. tor slide, finishing lower for after announcing that CEO
wake of rising oil and other stocks gave up 9.69 points, Regions Financial gained the third day in a row. The Margo Georgiadis is step-
commodity prices. or 0.6 percent, to 1,564.12. 4.1 percent to $18.89. stock lost 4.1 percent to ping down and is being
“Higher commodity prices, “This is just the market tak- Technology stocks were $165.72. succeeded by a company
a little bit more inflation ing a breather here in an the biggest contributor to Mattel was one of the big- director and former studio
pressure and higher inter- up month,” Campbell said. the market decline, adding gest decliners among con- executive. q