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Exclusive: Wells Fargo sanctions are on ice under Trump official - sources

Exclusive: Wells Fargo sanctions are on ice under Trump official - sources
From Reuters - December 7, 2017

WASHINGTON (Reuters) - The new acting head of the U.S. consumer finance watchdog is reviewing whether Wells Fargo & Co (WFC.N) should pay tens of millions of dollars over alleged mortgage lending abuse, according to three sources familiar with the dispute.

The San Francisco-based bank said in October that it would refund homebuyers who were wrongly charged fees to secure low mortgage rates - a black mark against a lender which has already been roiled by scandal over its treatment of customers.

The Consumer Financial Protection Bureau (CFPB) had been investigating the mortgage issue since early this year, said one current and two former officials. The agency accepted an internal review from Wells Fargo and set settlement terms in early November, said the sources, who were not authorized to speak about internal discussions.

But that matter and roughly a dozen others are in question now that Mick Mulvaney, the agency chief tapped by President Donald Trump, has said he is reviewing the CFPBs prior work.

Richard Cordray, the former CFPB director who initiated the Wells Fargo action, approved the terms of a possible settlement before stepping down, said the sources.

That proposal envisions 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, sources said.

More than 100,000 borrowers paid the fee to lock in a fixed-rate loan between September 2013 and February 2017, the bank has said, adding it believes a substantial number of those charges were appropriate.

A Wells Fargo spokesman on Thursday declined to comment on the CFPB actions but said the bank was committed to returning any fees that were wrongly levied.

Over the next few months we will be contacting other customers who paid those fees and will provide refunds, said spokesman Tom Goyda.

Mulvaney has pledged to examine enforcement work that Cordray had left unfinished, which includes the potential Wells Fargo sanctions.

In an interview with the Washington Times newspaper last week, Mulvaney said he is reviewing 14 open enforcement matters that Cordray left on his desk.

A CFPB official said that review should not taint any eventual settlements.

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