Business & Financial

Wells Fargo agrees to pay $1 billion to settle customer abuses

FILE PHOTO: A Wells Fargo branch in the Chicago suburb of Evanston Illinois

FILE PHOTO: A Wells Fargo branch is seen in the Chicago suburb of Evanston, Illinois, U.S., February 10, 2015. REUTERS/Jim Young/File Photo

(Reuters) – Wells Fargo & Co has agreed to pay $1 billion in penalties to federal regulators to settle a probe into abuses at its auto and mortgage businesses, the bank and regulators said on Friday, confirming an earlier Reuters report.

The settlement is the most aggressive move by regulators during the Trump administration to punish a major bank and follows revelations that the United States’ third-largest lender had opened millions of sham retail accounts that customers did not want.

Wells Fargo said the settlement reduces its reported first-quarter 2018 net income by 16 cents per share to 96 cents per share. The bank said it has adjusted its preliminary results to account for an additional accrual of $800 million.

Wells Fargo said it would also be required to submit, for review by its board, plans detailing ongoing efforts to strengthen compliance and risk management, and its approach to customer remediation efforts.

(Reporting by Patrick Rucker in Washington and Mekhla Raina, Aparajita Saxena and Sweta Singh in Bengaluru; Editing by Meredith Mazzilli)

 

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