trending Market Intelligence /marketintelligence/en/news-insights/trending/Kbm-yhvxrDakJeX_uAQ8vQ2 content esgSubNav
In This List

Severe enforcement actions pile up at Wells Fargo Bank

Blog

Banking Essentials Newsletter: June Edition, Part - 2

Blog

Insight Weekly: Fed's policy stance; overdrafts under scrutiny; energy stocks rally

Case Study

A Chinese Bank Strengthens its Credit Risk Assessments

Blog

Latin American and Caribbean Market Considerations Blog Series: Focus on LGD


Severe enforcement actions pile up at Wells Fargo Bank

Wells FargoBank NA's Sept. 6 cease and desist order became the bank's sixth activesevere enforcement action from a federal banking regulator — more than any otherbank in the U.S.

According to the OCC's order, Wells Fargo's compensationprograms pressured its employees into opening deposit and credit card accountsfor customers without their approval.

The company was also hit with a combined $185 million in , splitbetween a $100 million fine from the Consumer Financial Protection Bureau, a$35 million civil moneypenalty from the OCC and a $50 million settlement with the City andCounty of Los Angeles. The $100 million penalty is the largest fine the CFPB hasever issued.

Wells Fargo stated that it fired 5,300 employees as a resultof the fake account conduct and has removed product sales goals going forward for retailbankers.

SNL Image

McLean, Va.-based HSBC Bank USA NA is under five severe enforcementactions — the second-most active orders among any bank in the country. InApril, HSBC Bank USA received a cease and desist order from the OCC regarding itsbilling practices fora credit card protection product. According to the document, customers werebeing billed for a product they were not receiving.

JPMorgan ChaseBank NA, CitibankNA and Bank ofAmerica NA are each operating under four severe enforcementactions. Bank of America and Citi each received a severe enforcement actionlast year, while JPMorgan has not received any since 2014.

SNL Image

But as large banks continue to pile up severe enforcementactions, the overall industry trend is falling. Only 261 banks remained under asevere enforcement action as of Oct. 6, down from 270 as of and 304 as of .

SNL Image

S&P Global Market Intelligence defines severeenforcement actions as cease and desist orders, prompt corrective actiondirectives, and formal agreements/consent orders handed to a bank or thrift bya federal regulator. This analysis does not include severe enforcement actionsissued to holding companies or credit unions.

It is important to note that certain cease and desistorders issued by federal regulators in the recent past may be referred to asconsent agreements on regulatory websites due to a change in language. However,a cease and desist order and a consent order are derived from the same sectionof law 12 U.S.C. 1818(b). Both orders are structured the same, outlining areasof concern and the corrective actions that an institution must take. In orderto maintain consistency with previous years, this analysis refers to theserecent actions as cease and desist orders.

Click to view the map as a PDF.

To view a refreshable spreadsheet of all operating banks and thrifts under a severe enforcement action as of Oct. 6, click here.

For a spreadsheet listing the five most recent enforcement actions for an individual bank or thrift, click here. Click here to visit SNL's enforcement actions page.