Wells Fargo & Co. is poised to pay roughly $ 3 billion to settle federal investigations into a range of consumer abuses that were rampant at the bank for years, according to a person with direct knowledge of the matter.
The Department of Justice and Securities and Exchange Commission may announce penalties as early as Friday, the person said, asking not to be identified because talks are confidential. The company isn’t expected to plead guilty to a crime, the person said.
Spokespeople for the company and Justice Department declined to comment. A spokeswoman for the SEC didn’t immediately respond to a message seeking comment.
The long-anticipated settlement would mark the largest yet from a series of scandals that claimed two chief executive officers and fueled billions of dollars in operating losses tied to legal costs. The San Francisco-based bank already set aside more than $ 3 billion for legal matters in the latter half of 2019. The New York Times reported earlier Thursday that a settlement may be imminent.
The accords are another step in efforts by CEO Charlie Scharf, who took over in October, to turn around the lender as he conducts a review of all operations. Still, the firm remains under a growth cap imposed by the Federal Reserve. And last month the Office of the Comptroller of the Currency announced civil charges against eight former senior executives, some of whom settled.
The scandals erupted in 2016, when the bank conceded that employees may have opened millions of fake accounts to meet sales goals. The company’s expenses surged as additional lapses, abuses and wrongdoing surfaced across business lines including mortgages and auto lending.
In some cases, the bank wrongly forced drivers into auto insurance policies. Borrowers who bought a car through Wells Fargo and let their insurance lapse could be charged for “force-place” policies. The bank enrolled about 2 million drivers into such policies and more than a quarter of those were not needed, regulators have said.
They’ve long taken a toll on Wells Fargo’s reputation and stock. The shares are down 12 percent this year, putting the price below where it was when regulators first described the abuses more than three years ago.
Among other settlements, Wells Fargo has already paid more than $ 1 billion to federal regulators for consumer mistreatment, $ 575 million to 50 states and the District of Columbia and $ 480 million for an investor class-action lawsuit.
