Less than two years after being fined $185 million over what was described as “the widespread illegal practice of secretly opening unauthorized deposit and credit card accounts,” Wells Fargo has been ordered to pay $1 billion related to mortgage and auto loan violations. The settlement, imposed by the Consumer Financial Protection Bureau (CFPB) and the Office of the Comptroller of the Currency (OCC), revealed that the bank was likely causing substantial injury to consumers by “inappropriately and inconsistently charging borrowers extra fees that should have been absorbed by the bank, under its existing policy.” The settlement – which is the largest imposed by the CFPB, to-date – requires Wells Fargo to reimburse affected consumers and make improvements to its risk management and compliance policies.
This incident is one more example of the importance of avoiding policies and every day practices that could harm your account holders. If you are running an outdated overdraft program or aren’t providing ongoing training opportunities for frontline staff, you could be overlooking important changes in regulations and best practices. Since Reg E was implemented, JMFA has updated account holder disclosures and provided retraining opportunities for clients dozens of times.