Wells Fargo hits new $250 million fine for not paying errant customers

Wells Fargo hits new $250 million fine for not paying errant customers

A prominent US banking regulator has fined Wells Fargo $250 million and imposed new restrictions on its business after discovering deficiencies in its earlier efforts to repay previously affected customers.

The head of the office of Currency declared that the bank did not meet the requirements of the 2018 approval order when the regulator ordered the bank to pay customers who had charged excessive or improper fees.

"Wells Fargo did not meet the requirements of the OCC 2018 action against the bank. This is unacceptable," Acting Comptroller Michael Hsu said in a statement.

Specifically, the OCC said Wells Fargo's efforts to identify and repay customers hit by the bank were insufficient, citing "significant shortcomings" in its earlier attempt.

In 2018, Wells Fargo agreed to a $1 billion joint settlement with regulators, who discovered the bank had layered insurance hundreds of thousands of drivers and routinely assessed excessive and improper fees on homebuyers.

As part of the earlier approval order, the bank was directed to establish a program to identify and pay compensation to aggrieved customers.

In a statement, Charles Scharf, chief executive of Wells Fargo, said the new sanction showed that more work was needed to address "significant and long-standing deficiencies."

"Our work to build the right foundation for a company of our size and complexity will not follow a straight line. We are managing several issues at once, and progress will come with setbacks. However, we believe we are making significant progress," he added.

The penalty marks the latest blow to the bank, which began addressing widespread customer abuse nearly five years ago.

Last year, Wells Fargo agreed to pay $3 billion to resolve civil and criminal investigations into the company's fraudulent and leveraged sales practices. The ACC has previously fined eight former executives more than $58 million.

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