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☆ Wells Fargo to shrink mortgage business, exit correspondent lending
▼ + stars: | 2023-01-10 | by ( ) www.reuters.com time to read: +1 min

Jan 10 (Reuters) - Wells Fargo & Co (WFC.N) will slim down its home lending business by reducing its mortgage servicing portfolio and exiting the correspondent lending business, the company said on Tuesday. “We are making the decision to continue to reduce risk in the mortgage business by reducing its size and narrowing its focus," Kleber Santos, the bank's chief executive for consumer lending, said in a statement. Demand for mortgages and refinancing has weakened as U.S. interest rates climbed, making it more costly to buy homes. The slowdown prompted Wells Fargo to cut thousands of jobs in is mortgage unit across the country last year. Reporting by Mehnaz Yasmin in Bengaluru; Editing by Maju Samuel and Bill BerkrotOur Standards: The Thomson Reuters Trust Principles.

"With most U.S. economists forecasting either a recession or significant slowdown this year, banks will likely incorporate a more severe economic outlook," said Morgan Stanley analysts led by Betsy Graseck in a note. Rising prices and higher borrowing costs have prompted consumers and businesses to curb their spending, and since banks serve as economic middlemen, their profits decline when activity slows. Reuters GraphicsStill, lenders stand to gain from rising rates that allow them to earn more from the interest they charge borrowers. Morgan Stanley and Citigroup, among others, have also cut jobs after a plunge in investment-banking activity. Analysts will also watch if banks such as Morgan Stanley and Bank of America book any writedowns on the $13-billion loan to fund Elon Musk's purchase of Twitter.

☆ Wells Fargo labors under $100 bln sin discount
▼ + stars: | 2023-01-10 | by ( John Foley | ) www.reuters.com time to read: +6 min

Wells Fargo shows what happens when misbehavior becomes a feature rather than a bug. TRAGIC NUMBERSerial mischief has cost Wells Fargo investors in three ways. Second, there are the expenses Wells Fargo has incurred from its internal deep clean. A little more than seven years ago, Wells Fargo, Bank of America (BAC.N) and JPMorgan (JPM.N) were roughly the same size in terms of market cap. At $161 billion, Wells Fargo now sits $110 billion short of Bank of America and a whopping $243 billion below JPMorgan.

☆ U.S. CFPB orders Wells Fargo to pay $3.7 bln for mismanagement
▼ + stars: | 2022-12-20 | by ( ) www.reuters.com time to read: 1 min

Dec 20 (Reuters) - The U.S. Consumer Financial Protection Bureau (CFPB) on Tuesday ordered Wells Fargo & Co (WFC.N) to pay $3.7 billion, citing widespread mismanagement of auto loans, mortgages and deposit accounts. Reporting by Manya Saini in Bengaluru; Editing by Shailesh KuberOur Standards: The Thomson Reuters Trust Principles.

☆ U.S. CFPB orders Wells Fargo to pay $3.7 bln in penalties for mismanagement
▼ + stars: | 2022-12-20 | by ( ) www.reuters.com time to read: 1 min

Dec 20 (Reuters) - The U.S. Consumer Financial Protection Bureau (CFPB) on Tuesday ordered Wells Fargo & Co (WFC.N) to pay a penalty of $3.7 billion, citing widespread mismanagement of auto loans, mortgages and deposit accounts. Reporting by Manya Saini in Bengaluru; Editing by Shailesh KuberOur Standards: The Thomson Reuters Trust Principles.

To combat high inflation, the Federal Reserve has raised interest rates this year at the fastest clip in 40 years. But analysts warn that high interest rates and potentially unfavorable terms can trip up shoppers, eroding the hoped-for savings. That’s the highest interest rate since the credit card marketplace began tracking it for store cards in 2018. Using credit cards can help build credit. And with fees and rates for new store cards even higher than the current record levels for traditional credit cards, “many people’s financial margin for error is basically zero,” Schulz says.

☆ Wells Fargo under pressure from CFPB to pay over $1 bln in fine- Bloomberg News
▼ + stars: | 2022-11-04 | by ( ) www.reuters.com time to read: 1 min

Nov 4 (Reuters) - Wells Fargo (WFC.N) is under pressure from the U.S. Consumer Financial Protection Bureau to pay more than $1 billion to settle a slew of investigations into ill-treatment of its customers, Bloomberg News reported on Friday, citing people familiar with the matter. The bank declined to comment on the report. Reporting by Mehnaz Yasmin in Bengaluru; Editing by Shinjini GanguliOur Standards: The Thomson Reuters Trust Principles.

"These are junk fees," President Joe Biden told reporters at the Eisenhower Executive Office Building. The White House said the move could eliminate billions in banking fees. The agency said that both fees likely violate the Consumer Financial Protection Act's prohibition on unfair fees that are unavoidable to consumers. In a fact sheet, the White House noted that bank overdraft and non-sufficient funds fees accounted for an estimated $15.5 billion in revenue for banks in 2019. He cited processing fees for concert tickets and resort fees at hotels as two items his administration is examining.

"These are junk fees. The agency said that both fees likely violate the Consumer Financial Protection Act's prohibition on unfair fees that are unavoidable to consumers. In a fact sheet, the White House noted that bank overdraft and non-sufficient funds fees accounted for an estimated $15.5 billion in revenue for banks in 2019. He cited processing fees for concert tickets and resort fees at hotels as two items his administration is examining. There's tens of billions of dollars and other junk fees across the economy that I'm directing my administration to reduce or eliminate," Biden said.

☆ U.S. consumer agency to move ahead with 'open banking' rule this week
▼ + stars: | 2022-10-25 | by ( Hannah Lang | ) www.reuters.com time to read: +2 min

(Reuters) -The U.S. Consumer Financial Protection Bureau (CFPB) will move forward this week with an “open banking” rule that could dramatically boost competition in the consumer finance industry and increase Americans’ access to financial services. FILE PHOTO: Sign is seen at the Consumer Financial Protection Bureau (CFPB) headquarters in Washington, D.C., U.S., August 29, 2020. The U.S. Congress mandated open banking after the 2008 financial crisis, but the CFPB only issued an ‘advance notice of proposed rulemaking’ seeking feedback on a potential rule in October 2020. “In consumer financial services, we have a number of highly concentrated submarkets: the credit reporting conglomerates, the card networks, the core processors, and more. Proponents of open banking argue that it would make it easier for non-banks like technology companies to compete with traditional financial institutions, lowering costs and boosting millions of Americans’ access to financial services.

☆ Appeals Court Ruling Casts Shadow Over CFPB Activities
▼ + stars: | 2022-10-21 | by ( Andrew Ackerman | ) www.wsj.com time to read: 1 min

WASHINGTON—An appellate court ruling that the U.S. Consumer Financial Protection Bureau is unconstitutionally funded could undermine the agency’s work over its nearly 12 years of existence, legal experts said, including rules that ensure smooth functioning of the $13 trillion mortgage market. The decision, by a three-judge panel of the Fifth U.S. Circuit Court of Appeals in New Orleans, is the latest blow to hit the consumer financial regulator that has long been politically polarizing.

Oct 19 (Reuters) - A federal appeals court ruled on Wednesday that the U.S. Consumer Financial Protection Bureau's funding apparatus is unconstitutional, faulting a system Democrats designed to insulate the agency from requiring congressional appropriations. Circuit Court of Appeals ruled that the CFPB's independent funding through the Federal Reserve rather than budgets passed by Congress violated the separation of powers principles in the U.S. Constitution. "The Bureau's perpetual self-directed, double-insulated funding structure goes a significant step further than that enjoyed by the other agencies on offer." It could ask the full 5th Circuit to reconsider the case or appeal to the U.S. Supreme Court. The Supreme Court in 2020 ruled in another case that the protection Congress originally afforded the CFPB director, who could only be fired for cause, was unconstitutional.

☆ CFPB Funding Method Found Unconstitutional by Federal Appeals Court
▼ + stars: | 2022-10-19 | by ( Andrew Ackerman | ) www.wsj.com time to read: 1 min

WASHINGTON—A federal appeals court found the U.S. Consumer Financial Protection Bureau is funded through an unconstitutional method, a ruling that threw out the agency’s regulation on payday lenders and struck a blow against how the agency operates. The ruling, by a three-judge panel of the Fifth U.S. Circuit Court of Appeals in New Orleans, found the CFPB’s funding structure violated the Constitution’s doctrine of separation of powers, which sets the authority of the three branches of government. Congress has the sole power of the federal purse, and the bureau’s funding structure undercuts that authority, the court said.

WASHINGTON, Sept 28 (Reuters) - The U.S. Consumer Financial Protection Bureau has ordered Regions Financial Corp (RF.N) to pay $191 million in fines and refunds, after the regulator said the Birmingham, Alabama-based bank charged customers illegal overdraft fees for years. From 2018 to 2021 Regions charged roughly $141 million in illegal fees, which will be refunded, the CFPB said in a statement on Wednesday. The bank will also pay a $50 million fine. "Regions Bank raked in tens of millions of dollars in surprise overdraft fees every year, even after its own staff warned that the bank's practices were illegal," CFPB Director Rohit Chopra said in the statement. "Too often, large financial firms make a calculation that continuing to break the law is more profitable than following it."

☆ U.S. consumer watchdog plans to regulate ‘buy-now, pay-later’ companies
▼ + stars: | 2022-09-15 | by ( ) www.nbcnews.com time to read: +4 min

The U.S. Consumer Financial Protection Bureau (CFPB) plans to start regulating “buy-now, pay-later” (BNPL) companies like Klarna and Affirm Holdings due to worries their fast-growing financing products are harming consumers, the agency said on Thursday. The watchdog, which does not currently oversee BNPL companies or products, will issue guidance or a rule to align sector standards with those of credit card companies, it said. The agency also pointed to customer data collection as a consumer risk, and said it would start identifying data surveillance practices BNPL companies should avoid. BNPL companies are likely to fight that assertion, however. Share prices of public “buy-now, pay-later” companies have been under pressure this year, with Affirm down more than 75% and Zip down 79%.

☆ Consumer watchdog plans to regulate 'buy now, pay later' lenders similar to credit card companies
▼ + stars: | 2022-09-15 | by ( Chelsey Cox | ) www.cnbc.com time to read: +4 min

The U.S. Consumer Financial Protection Bureau plans to subject "buy now, pay later" lenders to the same vigorous oversight as credit card companies, saying the short-term financing industry harvests consumer data in ways that threatens consumer privacy. Considered a substitute for traditional credit cards, the buy now, pay later model allows consumers to pay off a loan in a few installments, most commonly four interest-free increments. "Buy Now, Pay Later firms are harvesting and leveraging data in ways we don't see with other companies," CFPB Director Rohit Chopra told reporters in a conference call Wednesday. "We want to ensure Buy Now, Pay Later firms are subjected to the appropriate examination just like regular credit card firms," Chopra said. The CFPB will determine how the credit card industry is incorporating buy now, pay later features.

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