US President Donald Trump speaks at the White House in Washington December 7, 2017. Photo: REUTERS/Joshua Roberts
US President Donald Trump took aim at the country’s third-largest bank on Friday tweeting that government fines and penalties against Wells Fargo & Co could be “substantially increased” amid an on-going sales scandal.
“Fines and penalties against Wells Fargo Bank for their bad acts against their customers and others will not be dropped, as has incorrectly been reported, but will be pursued and, if anything, substantially increased. I will cut Regs but make penalties severe when caught cheating!” Trump wrote.
Reuters reported on Thursday that the new acting head of the US consumer finance watchdog agency was reviewing whether Wells Fargo should pay tens of millions of dollars over alleged mortgage lending abuse, according to three sources familiar with the dispute.
It was not clear whether Trump was reacting to the Reuters’ report.
The White House referred questions to a spokesman for Mick Mulvaney, the new interim head of the Consumer Financial Protection Bureau (CFPB).
Mulvaney was not immediately available to comment.
Trump has pledged to roll back Obama-era rules that put Wall Street on a tighter leash after the 2007-09 crisis and the financial industry is hoping regulatory agencies will adopt a less aggressive approach to fines under his administration.
Those hopes were raised when Mulvaney, Trump’s pick to lead the CFPB on a temporary basis, said he would examine its enforcement activities.
The president’s tough talk on Wells Fargo did not have much of an impact on its shares. The stock, which had opened the session higher, initially dropped about 0.5 percent from its earlier level in the moments following the tweet, but has since recouped those losses. Wells Fargo shares are up about 0.75 percent on the day.
Wells Fargo spokesman Mark Folk declined to comment on Trump’s tweet. The CFPB was not immediately available to comment.
Richard Cordray, who left as head of the CFPB last month, had approved the terms of a possible settlement with Wells Fargo after some of its borrowers were wrongly charged fees to secure low mortgage rates.
That proposal envisioned a Wells Fargo payout of tens of millions of dollars but likely short of the record $100 million payout the bank made to the CFPB last year over a phony accounts scandal, according to three sources familiar with the matter.