Wells Fargo received a harshly worded letter from the Office of the Comptroller of the Currency, saying that the bank's financial irregularities have not been resolved, it was reported on Wednesday.
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Nov. 29 (UPI) -- A federal regulator is considering taking formal enforcement action against Wells Fargo over irregularities in the company's auto insurance and mortgage divisions.
The bank received a harshly worded letter from one of its chief regulators, the Office of the Comptroller of the Currency, earlier in November, noting that the bank had willingly injured its auto insurance and mortgage customers, the Wall Street Journal reported Wednesday. The letter said Wells Fargo failed to correct problems in a wide range of areas, not limited to those departments, sources familiar with the situation said.
The bank issued a statement saying it is "dedicated to making things right, fixing the problems and building a better bank." On Tuesday it announced it will exit the personal insurance business, saying the financial contribution of its policies for auto, homeowners, renters and umbrella insurance are "not material to the company."
The letter from the Treasury Department office centers on improprieties that surfaced earlier this year. Wells Fargo admitted that it required nearly 600,000 auto financing customers to pay for collision coverage which was covered by other insurance. About 20,000 customers had their cars wrongly repossessed after failure to pay for Wells Fargo insurance.
The bank has also said it improperly charged about $98 million to some customers to extend the interest-rate commitments on their mortgage applications.
The letter reinforces the outrage of federal regulators over some of Wells Fargo's banking practices. Last year it was disclosed that the bank created as many as 3.5 million accounts using fictitious or unauthorized customer information.
New sanctions or penalties by regulators could further damage Wells Fargo's reputation and could offer evidence for private lawsuits against the bank, the Wall Street Journal reported.
