- CBA on
- CBA Media
Wells Fargo Enters into Consent Orders with CFPB, OCC
September 8, 2016
On Thursday, September 8, 2016, Wells Fargo entered into a consent order with the CFPB to settle allegations it illegally opened consumer deposit and credit card accounts, and enrolled consumers in online bank services in violation of Dodd-Frank’s ban on Unfair, Deceptive, or Abusive Acts or Practices (UDAAP). The bank also entered into a consent order with the OCC to settle allegations it engaged in unsafe or unsound practices. Specifically, the regulators allege the bank:
- Opened nearly 1.5 million deposit accounts potentially unauthorized by consumers and transferred funds from consumers’ authorized accounts;
- Applied for about 565,000 credit card accounts that may not have been authorized by consumers;
- Requested and issued debit cards without consumers’ knowledge or consent;
- Created phony email addresses to enroll consumers in online banking services without their knowledge or consent;
- Developed an incentive compensation program misaligned with local branch traffic, staff turnover, or customer demand;
- Failed to establish an enterprise-wide sales practices oversight program to prevent and detect unsafe or unsound sales practices, or mitigate the risks resulting from such sales practices; and
- Failed to establish a comprehensive customer complaint monitoring process assessing customer complaint activity across the bank; adequately monitor, manage and report on customer complaints; and analyze and understand the potential sales risk.
As a result of the consent orders, Wells Fargo has agreed to provide full restitution to affected consumers. The bank will hire an independent consultant to review its procedures to prevent improper employee sales incentives in the future. And Wells Fargo will pay a $100 million civil money penalty to CFPB, $35 million to the OCC, and $50 million to the City and County of Los Angeles.