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Monday, April 23, 2018

US fined Wells Fargo with 1 billion dollars

Por Damian

Wells Fargo will pay federal authorities one billion dollars to settle lawsuits over its mortgage and loan divisions, the latest chapter in a widespread scandal at the US banking giant. However, apparently, none of the money will go directly to the victims of the company's abuses, reported El Nuevo Herald.

According to the agreement announced last Friday, Wells will pay 500 million dollars to the Office of the Comptroller of the Currency of the Department of the Treasury and another 500 million dollars to the Office for the Financial Protection of the Consumer of the United States (CFPB).

The CFPB measure is notable because it is the first fine issued by that agency under the leadership of Mick Mulvaney, appointed by President Donald Trump in November. It is also the largest fine applied by the CFPB in its history (the previous one is a 100 million dollars, also imposed on Wells Fargo) and equals the largest fine ever issued by the Office of the Comptroller of the Currency, against HSBC in 2012.

The fine against Wells Fargo was expected. The company had warned last week that it was in negotiations with the federal authorities on a possible agreement to settle the litigation and that the fine could reach the 1,000 million dollars. The settlement contains other conditions that will restrict Wells Fargo's activities. The bank will have to develop a risk management plan that must be approved by banking regulators and from now on it will have to receive approval from regulators before hiring executives.

"While it is true that we still have work to do, these orders demonstrate that we share the goals of our regulators and that we are committed to work with them in order to provide a service with concentration, responsibility and transparency", said the CEO of Wells Fargo, Tim Sloan, in a statement.

The 500 million dollars to the Office of the Comptroller of the Currency will be deposited directly to the Treasury of the United States, according to the order. The 500 million going to the CFPB will go to the civil compensation fund of the CFPB, which is used to help affected consumers in other cases, but none of the money goes directly to the victims of Wells Fargo.