April 20, 2018
Wells Fargo Fine Covered by Corporate Tax Cuts
Statement of Bartlett Naylor, Financial Policy Advocate, Public Citizen’s Congress Watch Division
Note: The U.S. Consumer Financial Protection Bureau (CFPB) and the U.S. Office of the Comptroller of the Currency (OCC) announced a combined $1 billion fine on Wells Fargo. The OCC cited “unsafe or unsound practices,” and the CFPB cited Wells Fargo’s “insurance program related to its auto loans” along with “how it charged certain borrowers for mortgage interest rate-lock extensions.
We welcome signs of life at the Trump-run CFPB and Comptroller. But this can’t end accountability for Wells Fargo’s widespread misconduct. Shareholders, who will be footing the bill for this fine, did not conceive, oversee and conceal this massive fraud. Wells Fargo executives did. When Washington prosecutes them, Wells Fargo and other bankers will understand what justice should mean.
Meanwhile, the Republican corporate tax cut more than offsets this penalty. The firm reportedly posted a $3.35 billion benefit from the new law. Wells Fargo is spending some of this benefit on share buybacks, which boost the price and senior management compensation. On balance, these are good times for Wells Fargo executives.