Trump says fines for Wells Fargo won't be dropped
WASHINGTON - President Donald Trump weighed in on an investigation into scandal-plagued Wells Fargo, tweeting Friday that fines and penalties against the bank would not be dropped, and may actually be "substantially increased."
Trump's statement comes a day after Reuters reported that Mick Mulvaney, the president's budget director and now acting director of the Consumer Financial Protection Bureau, was weighing whether the bank should have to pay tens of millions in fines already levied against it for mortgage lending abuses.
Wells Fargo has offered refunds to customers this year after acknowledging that its mortgage bankers unfairly charged them fees to lock in interest rates on mortgages.
It's just one of a number of legal problems the bank is facing, most notably a scheme in which bank employees opened more than 3 million fake accounts in order to meet sales quotas. Wells Fargo employees also tacked on insurance for auto loan customers who did not need it, in some cases leading to defaults and repossessions, and wrongly charged fees to student loan borrowers.
Fines and penalties against Wells Fargo Bank for their bad acts against their customers and others will not be dropped, as has incorrectly been reported, but will be pursued and, if anything, substantially increased. I will cut Regs but make penalties severe when caught cheating!
— Donald J. Trump (@realDonaldTrump) December 8, 2017
Jaret Seiberg, an analyst with Cowen Washington Research Group, said Trump's tweet suggests that Wells Fargo, as well as other Wall Street banks, will remain in the regulatory spotlight.
"Our view remains that Wells Fargo will remain a political punching bag given the bank's initial mishandling of the fake account controversy," he said in a note. "We suspect it will remain a target until the bank makes additional changes at the very top."
Under its previous director, Richard Cordray, the CFPB was considering additional fines and penalties against Wells Fargo, but the investigation was frozen last month after Cordray resigned from the federal watchdog agency, and Mulvaney took over.
"I'm looking at those [investigations] on an individual basis," Mulvaney told reporters last week.
Trump tweeted that the fines and penalties for the bank's "bad acts against their customers ... will not be dropped, as has incorrectly been reported, but will be pursued and, if anything, substantially increased."
"The best move politically is always to bash the biggest bank," Seiberg said. "The president fundamentally understands this."
The mortgage scandal impacted roughly 100,000 customers, which is substantially less than the number of customers who were give fake accounts, or who were stuck with unneeded auto insurance.
Wells Fargo had been fined $100 million by the CFPB, which at the time was the largest fine the agency had ever individually brought against a bank.