CFPB Could Fine Wells Fargo $1 Billion for Auto Insurance Scandal
The Consumer Financial Protection Bureau is preparing for an unprecedented fine against Wells Fargo. The Bureau could charge as much as $1 billion for overcharging auto loan customers for insurance, an act which resulted in 25,000 vehicle repossessions and 250,000 payment defaults.
According to Reuters, “three sources with knowledge of the plans” said Mick Mulvaney, the acting director of the CFPB, is pushing for a fine that exceeds several hundred million dollars. This will be the first fine Mulvaney has issued since his appointment last November, and the first major action for the bureau since Richard Cordray stepped down as director.
Is Mulvaney sending a message that the CFPB, under new leadership, will not tolerate financial negligence against consumers?
When Wells Fargo was fined for their fake accounts scandal, they only paid $185 million in reparations. They could have been charged up to $10 billion in penalties, but the bureau settled for less to expedite the process. This was when Cordray was still in power, representing one of the few remaining decision-makers from the Obama Administration. Trump-appointed Mulvaney has long opposed the way the CFPB operated under Cordray’s leadership.
The Wells Fargo fine may mark the beginning of a noticeable transformation within the Bureau.