At the time, as part of a $1 billion settlement, the bank agreed to improve its practices and pay restitution to customers. But that’s not happening fast enough, according to the OCC.
“Wells Fargo has not met the requirements of the OCC’s 2018 action against the bank. This is unacceptable,” said Acting Comptroller Michael J. Hsu.
In addition to the fine, the regulator is restricting the bank’s mortgage business until it can address the problems.
“The OCC’s actions today point to work we must continue to do to address significant, longstanding deficiencies,” said Charlie Scharf, Wells Fargo’s fourth CEO in five years, in a statement Thursday. “Building an appropriate risk and control infrastructure has been and remains Wells Fargo’s top priority.”
Wells Fargo shares were up slightly midday Friday, signaling that investors were shrugging off the OCC fine.
“Overall, I think this is a modest positive for the stock,” said Kyle Sanders, a senior analyst at Edward Jones. Sanders noted that the stock took a hit last week after media reports suggested bigger regulatory setbacks were around the corner. “For many investors, today’s announcement was less punitive than feared.”
In his statement Thursday, Scharf announced a silver lining of sorts that may have soothed investors. A separate consent order aimed at the bank’s sales practices from 2016 — this one from the Consumer Financial Protection Bureau — has expired.
“We have done substantial work designed to ensure that the conduct at the core of the consent order — which was reprehensible and wholly inconsistent with the values on which this company was built — will not recur,” the CEO said.
Scharf, who has worked to transform the bank since he took the helm in 2019, said the bank had come a long way, but isn’t out of the woods.
“Our work to build the right foundation for a company of our size and complexity will not follow a straight line … That said, we believe we’re making significant progress, the work required is clear, and I remain confident in our ability to complete it,” he said.
Separately, the OCC said Friday that a hearing would be held Monday in the case of three former Wells Fargo executives who have been accused of “material failures in risk management” related to the scandals.
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