Wells Fargo (NYSE:WFC) is facing new scrutiny from the Consumer Financial Protection Bureau (CFPB) over how it formerly disclosed and assessed monthly fees on certain consumer bank accounts.
The bank reported the new investigation in its recent quarterly filing, and the investigation was not disclosed in the bank’s annual report earlier this year, suggesting it is a new probe.
“The CFPB is also investigating certain of the Company’s past disclosures to customers regarding the minimum qualifying debit card usage required for customers to receive a waiver of monthly service fees on certain consumer deposit accounts,” the bank’s latest quarterly filing said.
Prior to the new disclosure, the CFPB had already been investigating if Wells Fargo had previously harmed customers with its practices of freezing and closing accounts after the bank suspected fraudulent activity.
In its latest filing, Wells Fargo also reported that losses from all potential pending litigation at the bank as of March 31 of this year could be as high as $2.6 billion, which is up from $2.4 billion at the end of last year.
Regulatory probes are nothing new for Wells Fargo. The bank has been dogged by them since its phony-accounts scandal came to light in 2016, in which employees at the bank opened millions of depository and credit card accounts without the authorization of customers.
Ever since, the bank has been under numerous consent orders and been tasked with correcting the issues and enhancing its regulatory infrastructure. The bank has made significant progress on this over the past year.
I suspect this new investigation is more minor and nothing compared to the magnitude of phony-accounts scandal. But any new regulatory investigations are likely to draw skepticism from investors given the bank’s past.
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