Wells Fargo is preparing itself for fines as high as $1 billion from a pair of federal regulators.
The San Francisco-based financial institution announced this news today in its first quarter financial results, noting that its results may need to be recalculated when the penalties are enacted.
“Wells Fargo & Company reported preliminary results, including net income of $5.9 billion, or $1.12 per diluted common share, for first quarter 2018, compared with $5.6 billion, or $1.03 per share, for first quarter 2017, and $6.2 billion, or $1.16 per share, for fourth quarter 2017,” the company said in its financial statement
. “These preliminary results are subject to change due to our ongoing discussions with the Consumer Financial Protection Bureau (CFPB) and Office of the Comptroller of the Currency (OCC) to resolve matters regarding our compliance risk management program and our past practices involving certain automobile collateral protection insurance policies and certain mortgage interest rate lock extensions (the “CFPB/OCC matter”), which the CFPB and OCC have collectively offered to resolve for an aggregate of $1 billion in civil money penalties. At this time, we are unable to predict final resolution of the CFPB/OCC matter and cannot reasonably estimate our related loss contingency.”
“I’m confident that our outstanding team will continue to transform Wells Fargo into a better, stronger company; however, we recognize that it will take time to put all of our challenges behind us,” said Wells Fargo CEO Tim Sloan in a statement.
Neither the CFPB nor the OCC publicly commented on this statement. This would be the first penalty enforcement levied by the CFPB since Mick Mulvaney took over the agency as its Acting Director, and is the latest problematic publicity for Wells Fargo. Earlier this week, the American Federation of Teachers (AFT), one of the nation’s most powerful labor unions, threatened to drop its participation in Wells Fargo’s mortgage program
unless the lender severs its ties with the National Rifle Association (NRA).