Trump promises heavy penalties for Wells Fargo

President Trump on Friday tweeted that the he’d ensure stiff penalties against Wells Fargo over allegations of financial impropriety the day after a report emerged that federal fines are being reconsidered.

“Fines and penalties against Wells Fargo Bank for their bad acts against their customers and others will not be dropped, as has incorrectly been reported, but will be pursued and, if anything, substantially increased,” Trump tweeted.

“I will cut Regs but make penalties severe when caught cheating!”

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Trump appeared to be responding to a Thursday report from Reuters that acting Consumer Financial Protection Bureau Director Mick Mulvaney was reviewing a pending settlement with Wells Fargo initiated by former Director Richard Cordray.

Reuters reported that Mulvaney was reconsidering a multimillion-dollar agreement with Wells Fargo to settle claims that they charged thousands of customers inappropriate mortgage fees.

The Reuters report did not say whether Mulvaney would drop the case altogether, as Trump claimed it did, or pursue tougher fines for Wells Fargo.

Trump’s tweet could be seen as an encroachment of of the Consumer Financial Protection Bureau (CFPB)’s independence. The bureau was established as an independent agency within the Federal Reserve system by the Dodd-Frank Act of 2010. 

“Who is running CFPB anyway? It’s supposed to be an independent agency,” tweeted Richard Painter, the White House ethics lawyer for President George W. Bush and a frequent Trump critic.

“What regs are getting ‘cut’? The regs against ripping off customers?”

Trump appointed Mulvaney, the White House budget director, last month to lead the CFPB until he nominates and the Senate confirms a permanent director. Mulvaney, a staunch conservative and critic of the agency, said he would review each of the 14 pending enforcement actions he inherited from Cordray.

Federal and state regulators have kept constant watch on Wells Fargo in response to the several scandals revealed at the San Francisco-based bank over the past three years. The CFPB fined Wells Fargo more than $100 million for opening and charging fees on potentially more than 2 million accounts opened without customer consent.

Wells Fargo also allegedly signed up customers for unwanted and unnecessary insurance policies.