Federal regulators are poised to impose a $1-billion penalty on Wells Fargo (NYSE: WFC) for a variety of alleged misdeeds, including forcing customers to buy auto insurance policies that they didn't need.
The expected penalty, levied by the Consumer Financial Protection Bureau (CFPB) and the Office of the Comptroller of the Currency, is likely to be announced Friday, and could represent the largest fine the agency has ever levied. The bureau was created as part of the Dodd-Frank law enacted in response to the global financial crisis.
It would mark the toughest action that the Trump administration has taken against a major bank. And it is the latest blow to Wells Fargo, which for years was regarded as one of the country's best-run banks but lately has been reeling from a string of self-inflicted crises.
President Trump has advocated a rollback of regulations on the banking and other industries.
He has nominated industry-friendly officials to oversee key government agencies, including the consumer bureau, which is being run on an interim basis by Mick Mulvaney, who has pledged to defang the agency, criticizing it for wasteful spending and overzealous oversight that is strangling banks and other lenders.
Wells Fargo already has been handcuffed by federal regulators. In February, the Federal Reserve barred the bank from expanding until it cleans up its internal financial and risk systems. The Fed also pushed for Wells to bring new blood onto its board of directors.
Shares in Wells Fargo nonetheless increased in price 42 cents to $51.96, in early trading on Friday.
