CFPB, OCC Wells Fargo $1bn Fine

• The bank charged certain borrowers for mortgage interest rate-lock extensions.
• Use of unsafe and unsound practices on collateral protection insurance policies.
• Both regulators highlighted collaborative approach is now being taken by CFPB.

Enforcement

• $1bn fine for breach of auto-loan administration, and mortgage practices rules.
• Under terms of consent orders, Wells Fargo will remediate harmed consumers.
• OCC assessed $500mn fine, ordered restitution for unsafe or unsound practices.
• Develop, implement effective bank-wide compliance risk management program.

OCC Statement

• OCC said took the action given severity of the deficiencies and violations of law.
• For harm to consumers, and failure to timely correct deficiencies and violations.
• Found deficiencies in its enterprise-wide compliance risk management program.
• Constituted reckless, unsafe or unsound practice. and unfair practice in FTC act.
• Improperly placed and maintained protection insurance policies, for auto loans.
• Imposed improper level of fees associated with extensions of interest rate locks.

Severance payments

• Modified restrictions imposed in Nov. 2016, on approval of severance payments
  to employees, and appointment of senior executive officers or board members.
• Original restrictions applied to all staff, not only those responsible for violation.
• Restrictions still need approval re senior executive officers and on appointment.