Wells Fargo & Co. said it’s facing a new probe from the Consumer Financial Protection Bureau over checking-account practices.
The agency is examining the firm’s past disclosures to customers about how often they had to use a debit card to receive a fee waiver for certain deposit accounts, the bank said in a quarterly regulatory filing. Wells Fargo had previously disclosed that the agency is investigating whether its customers were harmed by the firm’s historical practice of freezing or closing accounts due to suspected fraud.
“As previously reported, we conducted a review of the fee waiver based on debit-card usage, and we are issuing refunds to customers who may have found previous disclosures unclear,” Jim Seitz, a spokesman for Wells Fargo, said in an emailed statement. “It’s part of our broader ongoing efforts to make things right for our customers.”
The biggest U.S. banks have long faced push-back for the nearly $20 billion they collect in overdraft and other account fees each year. In response, Wells Fargo and many of its rivals offered checking accounts that are free as long as customers do certain actions such as using a debit card or setting up direct deposit.
“Wells Fargo has simplified the options for our customers to avoid the monthly service fee on their checking account, and we no longer offer an option to waive the monthly service fee based on debit-card usage,” Seitz said.
Wells Fargo said separately in the filing it now believes the high end of losses it could face tied to legal actions above what the company has already planned for is $2.6 billion, up from $2.4 billion at the end of last year.
It was a $185 million fine from the CFPB in 2016 over Wells Fargo employees opening accounts without customer approval that set off a years-long overhaul of the bank. The company is still embroiled in litigation over the matter.
This article was provided by Bloomberg News.