Wells Fargo & Co (NYSE:WFC) seems to have brushed shoulders with the US government if the latest tweets by President Donald Trump is anything to go by. Since last year, the bank has been fighting accusations of multiple scandals of mishandling its customers. Its bad acts have resulted in fines and penalties, which are not likely to be dropped as it is being speculated. Instead, Trump has threatened harsher penalties.
The embattled bank is battling a series of lawsuits and enforcement actions. Reports from an insider indicate that negotiations between Wells Fargo and officials of the consumer agency have not yielded any positive results.
The President’s firm commitment to punishing bad actors
Some of the severe accusations against Wells Fargo include the creation of more than one million fraudulent accounts in clients’ names. The bank is also under investigations for having charged customers to lock in certain rates on mortgage loans. However, it is not clear whether or not the bank will be asked to pay to resolve the mortgage lending issue.
Already, it has paid $185 million in fines and reimbursements to customers. Nonetheless, according to Mick Mulvaney, Trump’s pick to lead the agency, Trump is very committed to protecting American consumers. It is perhaps the reason why the president has unveiled banking regulations, which he says have been hindering economic growth.
He has also dismissed looming speculations of Consumer Financial Protection Bureau going easy on the banks acting badly.
What is the way forward for Wells Fargo?
The malpractices by Wells Fargo are wanting and for sure the banking sector seems to be operating on very shaky grounds. Apparently, the penalties are not only to the bank but to any company found conducting unfair practices.
Nonetheless, Trump’s tweet has raised concerns among legal experts who claim that it was not his duty to weigh into the work of an independent agency. Meanwhile, the bank declined to comment on Trump’s tweet.
However, it has indicated to have started the refund process of about $98 million, which is said to have been wrongfully billed to customers. That said, there are all signs that it will remain a target of the authority until it can be cleared off its unprofessional conduct.