Federal Reserve Board Announces Termination of Two Enforcement Actions with Wells Fargo
February 04, 2025
Washington, D.C. – The Federal Reserve Board (FRB) today announced the termination of two enforcement actions with Wells Fargo Bank, N.A. (Wells Fargo). The actions were initiated in 2021 and 2022, respectively, and alleged that Wells Fargo engaged in unsafe and unsound banking practices and violated consumer protection laws.
2021 Enforcement Action
The 2021 enforcement action alleged that Wells Fargo violated the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) by failing to maintain adequate risk management practices related to its auto lending and mortgage businesses. The FRB alleged that Wells Fargo’s risk management systems were inadequate to identify and mitigate risks associated with these lending programs.
2022 Enforcement Action
The 2022 enforcement action alleged that Wells Fargo violated the Truth in Lending Act (TILA) by failing to provide consumers with accurate and timely information about the terms and conditions of their mortgage loans. The FRB alleged that Wells Fargo failed to disclose important information, such as the loan amount, interest rate, and monthly payments, in a clear and understandable manner.
Termination of Enforcement Actions
The FRB has terminated both enforcement actions after Wells Fargo entered into consent orders with the Office of the Comptroller of the Currency (OCC). The OCC orders require Wells Fargo to take specific steps to improve its risk management practices and consumer protection compliance.
Wells Fargo’s Response
Wells Fargo issued a statement today acknowledging the termination of the enforcement actions. The bank stated that it has taken significant steps to address the issues raised by the FRB and is committed to providing safe and sound banking services to its customers.
Implications
The termination of the enforcement actions with Wells Fargo is a significant development in the regulatory landscape. It suggests that the FRB is willing to work with banks that have experienced compliance issues to improve their practices. However, it also sends a message that banks will be held accountable for violating banking laws and consumer protection regulations.
Additional Information
- The FRB’s consent order related to the 2021 enforcement action can be found here: [link]
- The FRB’s consent order related to the 2022 enforcement action can be found here: [link]
- The OCC’s consent order with Wells Fargo can be found here: [link]
Federal Reserve Board announces termination of two enforcement actions with Wells Fargo
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