https://www.bizjournals.com/charlotte/news/2019/05/05/wells-fargo-expects-more-remediation-on-deposit.html?ana=wsoc
Wells Fargo & Co. (NYSE: WFC) is investigating two issues with its consumer deposit accounts — both of which will likely come with payouts to regulators and/or those affected.
The bank said it is reviewing past disclosures to customers about the minimum qualifying debit-card usage required to waive service fees on the accounts. Customers were confused about the types of transactions that counted toward the minimum, Wells Fargo said.
"We expect to refund certain monthly service and related fees to affected customers," the filing read.
The time frame in question was not provided.
Wells Fargo also said it is reviewing "historical practices" of freezing and/or closing deposit accounts flagged for fraud suspicion. The bank said remediation will also likely be required in this matter.
"To the extent issues are identified, we will continue to assess any customer harm and provide remediation as appropriate. This effort to identify other instances in which customers may have experienced harm is ongoing, and it is possible that we may identify other areas of potential concern," Wells Fargo said in the filing.
Legal costs are rising for the company. It estimated in the filing that it could spend up to $3.1 billion more than it had accrued as of March 31 for legal issues. That's compared to its $2.7 billion estimate as of Dec. 31, 2018.
The San Francisco-based bank outlined a growing list of remedial issues in Friday's quarterly filing with the Securities and Exchange Commission.
Still under review are Wells Fargo's auto-lending business, add-on sales practices, fees calculations on fiduciary and custody accounts, mortgage loan modifications and wealth management practices.
In February 2018, Wells Fargo entered into a consent order with the Federal Reserve that capped its assets at $1.95 trillion until certain risk-management requirements are met. Executives expect the asset cap to extend at least through 2019. The bank is currently operating with $1.89 trillion in total assets.
Then, in April 2018, Wells Fargo agreed to pay $1 billion as part of another consent order with the Consumer Financial Protection Bureau and the Office of the Comptroller of the Currency. The order was in response to Wells Fargo's faulty collateral-protection insurance policies and mortgage interest-rate lock extensions.
Now-former Chief Executive Tim Sloan stepped down from his role in March and will officially retire on June 30.
"While I'm confident in my ability to effectively lead Wells Fargo through the work that remains to be done, it has become apparent that the focus on me has become a distraction that impacts our ability to successfully move Wells Fargo forward," Sloan said.
Bank watchers and analysts viewed Sloan's sudden departure as a way to placate regulators, who remain critical of Wells Fargo's attempts at remediation.
Allen Parker is serving as interim CEO while the board of directors searches for someone outside the company to fill the role. Last month, Parker acknowledged the bank's woes, saying there is a "substantial amount of work yet to do" in righting the company's wrongs.