Back when Wells Fargo’s little unauthorized accounts scandal broke, the bank was forced to start looking for other potential problems—problemsit hashad nodifficultyfinding. But the biggest problem seems to be that wherever Wells looks, it finds more unauthorized accounts opened for its benefit at the expense of the person for whom the account was allegedly opened.
Bank executives are in touch with officials from the Office of the Comptroller of the Currency over the problems, which Wells Fargo has said affected as many as 570,000 auto-loan customers. The bank said it is in the process of issuing customer refunds totaling around $80 million….
Wells Fargo realized there was a problem with this insurance while working on broader fair-lending reviews in mid-2016 and spotting problems in the collections process, among other factors, people familiar with the reviews said.
The bank said in a regulatory filing that its review of potentially unauthorized accounts could reveal a “significant increase” in the number of accounts involved, up from the 2.1 million that it previously estimated. Wells Fargo said it had expanded its investigation to add three years to its review period, which covered accounts opened from 2011 to mid-2015.
Of course, entities other than Wells Fargo have already shown that the bank’s bad apples were opening unauthorized accounts way back in 2005, which for those of you who do work for Wells Fargo means adding three years isn't going to cover it. And, oh yea, there’s more: Wells wasn’t just opening accounts without authorization, it was also closing them without authorization.
Wells Fargo also indicated that it has a new regulatory issue looming: an investigation by the federal Consumer Financial Protection Bureau into whether customers were harmed by the bank’s practice of freezing, and in some cases closing, bank accounts suspected of being affected by fraudulent activity.
Add it to the list, and to quarterly regulatory filings that could now run into the hundreds of thousands of pages.
"Wells Fargo flagged several items in its 10Q filed on Friday, which together, weighed on the stock in late afternoon trading. … On our follow-up call, mgmt noted that as Wells Fargo tries to improve its transparency, it has adopted a policy whereby it will disclose all outstanding legal matters (and not just updates) in its 10Q filings, going fwd," Evercore ISI analyst John Pancari wrote in a note to clients Sunday. "Visibility into the regulatory and legal issues at Wells remains limited, and earnings momentum appears to be suffering somewhat."
Wells Fargo May Have Found More Fake Accounts Created by Employees [DealBook]
Wells Fargo Might Face More Regulatory Sanctions [WSJ]
Wells Fargo vows to disclose all legal matters amid scandals, analyst says [CNBC]