- Wells Fargo raised the amount it estimates it will spend on legal fees to $3.9 billion, a 26% jump from the previous figure, $3.1 billion, according to a recent Securities and Exchange Commission (SEC) filing. It's the third time since September 2018 the bank has increased that number.
- The San Francisco-based bank attributed the increase to a variety of factors, including its retail sales practices. "Wells Fargo is unable to determine whether the ultimate resolution of the retail sales practices matters will have a material adverse effect on its consolidated financial condition," the bank said in the filing.
- In addition to the bank's 2016 fake accounts scandal, where employees opened millions of fraudulent accounts as part of an incentive scheme, the bank has drawn fire over practices in its auto insurance, mortgage and wealth management divisions.
Wells Fargo has agreed to pay more than $4 billion since the fall of 2016 to settle various regulatory disputes, according to the Winston-Salem Journal.
Investigations or inquiries into the bank's retail sales practices are at varying stages with federal, state and local government agencies, including the Department of Justice, the SEC and the Department of Labor, Wells Fargo said in the regulatory filing.
The Justice Department in March 2018 called for the bank to conduct an independent investigation into its wealth management business, according to the Wall Street Journal. Wells Fargo said its board is assessing "whether there have been inappropriate referrals or recommendations, including with respect to rollovers for 401(k) plan participants, certain alternative investments, or referrals of brokerage customers to the company's investment and fiduciary services business."
The next month, Wells Fargo reached a $1 billion settlement with the Consumer Financial Protection Bureau and the Office of the Comptroller of the Currency after the bank forced car loan customers to buy unnecessary — and pricey — insurance that may have contributed to 27,000 repossessions.
The bank has settled a number of lawsuits filed by nongovernmental parties seeking damages related to its retail sales practices.
Wells Fargo entered into a $142 million settlement agreement in 2017 to resolve claims regarding products or services provided without authorization or consent.
A judge this past December approved a $480 million settlement of a shareholder class-action lawsuit related to the fake-accounts scandal.
In response to the bank's "consumer abuses and compliance breakdowns," the Federal Reserve announced last year that it would restrict the bank's growth until it "sufficiently improves its governance and controls."
Wells Fargo is not allowed to hold total assets above the $1.93 trillion it had at the end of 2017, a cap that remains in place through at least the end of this year, according to the Winston-Salem Journal.