Wells Fargo & Company (WFC - Free Report) is struggling to satisfy one of the regulators — Joseph Otting — on the reimbursements it is providing to clients who were wronged in auto insurance and mortgage lending business scandals.
At a hearing held on Tuesday, Otting, chief of the Office of the Comptroller of the Currency (“OCC”) told senators “We are not comfortable where we are with them”. He said that the bank is still measuring the financial harm that was caused to the 600,000 drivers who were improperly pushed into buying auto insurance.
Per an article by Bloomberg, formal date for compensation distribution has not been decided so far, but Otting assured the regulators that “hundreds” of examiners are looking over the matter.
In September 2018, the Consumer Financial Protection Bureau and OCC rejected the plan Wells Fargo had submitted related to the massive $1 billion fine that was imposed on it over auto lending and mortgage fraud.
The San Francisco-based bank was accused of pocketing commissions by pushing unnecessary auto policies on its customers. Further, regarding the mortgage lending fraud, Wells Fargo was accused of charging extra fees to customers when their mortgage applications were delayed.
Since the break-out of the bogus account openings scandal in late 2016, Wells Fargo has been getting involved in a number of probes, which are likely to keep its cost base elevated. Also, it continues to struggle with asset cap that Federal Reserve had imposed in February.
However, the bank has diligently taken remedial measures and initiatives to keep afloat. Also, its cost-control plans might help it deal with the pressure on costs.
Wells Fargo’s shares have lost 6.2% over the past three months against 3.3% growth recorded by the industry it belongs to.
The stock carries a Zacks Rank #3 (Hold).
Stocks to Consider
First Financial Bankshares, Inc. (FFIN - Free Report) has witnessed stable estimates for current-year earnings in the past 60 days. Over the past six months, the company’s share price has been up 22.8%. It currently carries a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
First Mid-Illinois Bancshares, Inc.’s (FMBH - Free Report) 2018 earnings estimates have been revised slightly upward in the past 60 days. Additionally, the stock has jumped 8.3% in six months’ time. It currently carries a Zacks Rank #2.
Farmers & Merchants Bancorp Inc.’s (FMAO - Free Report) estimates for current-year earnings have been stable over the past 60 days. The company’s shares have risen 7.7% in the past six months. It sports a Zacks Rank of 1, at present.
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