History of CFPB Penalties: Putting Wells Fargo’s $1 Billion Fine in Context

Recently, Wells Fargo confirmed rumors that the company is facing a potential $1B fine from the Consumer Financial Protection Bureau (CFPB) and the Office of the Comptroller of the Currency (OCC). Reports revealed last year that Wells Fargo allegedly sold customers unnecessary car insurance and charged mortgage applicants with rate extension fees that the bank should have covered. According to Wells Fargo, discussions are still ongoing, and the final penalty may yet change.

This would be the first enforcement action under the CFPB's new director, Mick Mulvaney, who took over the duties in November 2017. To put this penalty in perspective, we combed through data on all the fines imposed by the CFPB since it was founded in mid 2011.

Key Takeaways

  • The latest fine faced by Wells Fargo is more than twice the amount of fines levied by the CFPB in its first 12 months of operation ($485 million).
  • The potential $1B penalty faced by Wells Fargo would be the largest fine and the second-largest enforcement action taken by the CFPB, behind the $2B consumer relief order handed to Ocwen Financial.
  • To date, the CFPB issued $7.7 billion in enforcements. The average fine was $60.3 million.

A Closer Look at CFPB's Enforcement History

To date, the CFPB issued a total of $ 7,718,386,420 in fines to financial institutions, according to data we obtained from the Good Jobs First Violation Tracker, a national policy resource center. This is spread out across 128 total enforcements in the six years the organization has existed. Before this latest enforcement, Wells Fargo paid out $139 million —ranking it at 12th, in terms of total fines. However, should this $1 billion penalty be enforced, the bank would jump to second place, ahead of companies like Citigroup, Bank of America and JPMorgan Chase. As of today, only Ocwen Financial has faced a larger penalty. Ocwen, the country's largest nonbank mortgage loan servicer, was ordered by the CFPB in 2013 to provide $2 billion in principal reductions and $125 million in refunds to nearly 185,000 borrowers.

Keep in mind that some institutions may have faced higher fines due to their sheer size and how many consumers they impact—factors that are taken into consideration in the calculation of a fine. When company size is taken into account, Wells Fargo places near the bottom of the list for fines per $1M in assets.

Rank

CompanyFines & ReliefFines Per $1M In Assets
1Ocwen Financial$2,125,000,000$252,881
2Citigroup$821,490,000$427
3Bank of America$747,000,000$321
4SunTrust Banks$550,000,000$2,670
5Corinthian Colleges, Inc.$531,224,267$1,857,038
6JPMorgan Chase$520,500,000$199
7American Express$264,200,000$1,458
8Discover Financial Services$232,500,000$2,323
9Synchrony Financial$225,000,000$2,348
10Morgan Drexen$172,882,488N/A*
11Capital One Financial$165,000,000$451
12Wells Fargo$138,810,000$72
13Ally Financial$98,000,000$586
14Rome Finance$92,000,000$44,448
15Verizon Communications$70,000,000$272

*Data on total assets unavailable.

The CFPB has taken actions in a wide array of cases, though most fall under the umbrella of "consumer protection violations." The organization has also fined companies for student loan and mortgage abuses, banking violations and payday lending violations. The latter was the source of some controversy. Mulvaney ordered the CFPB to drop three ongoing cases against payday lenders back in March. These actions were approved by Mulvaney's predecessor, Richard Cordray, who retired in November.

Offense

Total Fines and Relief
Consumer Protection Violation$7,500,715,344
Banking Violation$170,950,000
Payday Lending Violation$19,000,000
Employment Screening Violation$13,000,000
Mortgage Abuses$10,600,000
Student Loan Abuses$4,010,000
Kickbacks And Bribery$111,076

Compared to other regulatory agencies, the CFPB is among the most active. If we examine enforcements since over the last six years, the CFPB issued 128. This takes into account offenses which primarily affect consumers, including: banking violations, student loan abuses, mortgage abuses, consumer protection violations, payday lending violations and discriminatory practices.

A graph showing how much the CFPB has issued in fines, over its existence.

Which Financial Institutions Received the Most Consumer Complaints?

While fines and penalties are the last step in an enforcement action, they often begin when consumers discover and report abuses (which are later discovered to be widespread). As part of this analysis, we also examined recent complaints submitted to the Consumer Financial Protection Bureau and made available through their online database. Despite the allegations of widespread abuses, Wells Fargo still didn't come close to matching the total complaints received by Equifax—the company which famously suffered a data breach exposing the personal details of millions of Americans.

Rank

Top 20 Most Complained About CompaniesTotal Complaints
1Equifax Inc.43,011
2Experian Information Solutions Inc.33,825
3Transunion Intermediate Holdings Inc.33,464
4Wells Fargo & Co.16,146
5Navient Solutions LLC.14,316
6Bank Of America, National Association14,067
7JPorgan Chase & Co.13,468
8Citibank N.A.11609
9Capital One Financial Corp.9,214
10Synchrony Financial6,177
11U.S. Bancorp4,027
12Nationstar Mortgage3,973
13American Express Co.3,913
14Ocwen Loan Servicing LLC3,811
15AES/PHEAA3,474
16Portfolio Recovery Associates Inc.3,446
17Ditech Financial LLC2,943
18Alliance Data Card Services2,839
19Discover Bank2,836
20Encore Capital Group Inc.2,632

We considered complaints submitted since Sept. 1, 2016. This was the last time we conducted an analysis of consumer complaints.

Sources:

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