Wells Fargo pays $250M for servicing deficiencies and C&D non compliance
Wells Fargo Bank, N.A., Sioux Falls, South Dakota, has been issued Consent Orders to Cease and Desist and to pay a $250,000,000 civil money penalty, for engaging in:
- unsafe or unsound practice(s) related to material deficiencies regarding the bank’s loss mitigation activities, including loan modification decisions and operational practices, and inadequate independent risk management and internal audit of the bank’s loss mitigation activities; and
- violations of the OCC's 2018 Consent Order related to enterprise-wide compliance risk management.
The OCC found and previously communicated to the bank these deficiencies and unsafe or unsound practices with respect to loss mitigation:
- The Bank has failed to fully implement and maintain adequate loss mitigation practices and related Independent Risk Management practices commensurate with the Bank’s size, complexity, and risk profile.
- The Bank’s loss mitigation decisioning tools (applications and end-user computing tools) and operational deficiencies have caused errors in the Bank’s loss mitigation processes and controls that negatively affected borrowers.
- The Bank’s inadequate controls, insufficient independent oversight, and ineffective governance related to loss mitigation activities have caused the Bank’s failure to timely detect, prevent, and quantify inaccurate loan modification decisions and impaired the Bank’s ability to fully and timely remediate harmed customers.
- The Bank’s Internal Audit coverage of loss mitigation activities are deficient and have failed to include all aspects of previously identified loan modification decision issues.
The OCC also found that, while the Bank has taken steps to comply with the 2018 Order and is committed to addressing the remaining requirements in the Order, the Bank has failed to fully and timely implement effective and sustainable corrective actions required by the Order related to enterprise-wide compliance risk management and customer remediation and is thereby in violation of the 2018 Order.