Although Wells Fargo does not have a deadline by which it aims to repay every driver it forced to buy auto insurance that was not required, unless it completes the reimbursements it will not get the all-clear from regulators.
According to a leading bank regulator, U.S. regulators are not convinced by Wells Fargo’s arguments that it has done enough to repay 600,000 drivers who were essentially forced to buy auto insurance.
“We are not comfortable where we are with them,” said Joseph Otting, the Comptroller of the Currency, at a hearing of the U.S. Senate Banking Committee.
In its statement, Wells Fargo said, it was working with regulators to repay drivers.
“We regret how this issue has impacted our customers,” said the bank in a statement.
The push-back by U.S. regulators is the latest setback Wells Fargo is facing over its sales practices.
In September 2016, Wells Fargo paid $190 million in fines after admitting that its employees had opened perhaps millions of phony customer accounts in order to hit their sales targets.
In April 2018, it paid a $1 billion in fine over its auto insurance and mortgage lending abuses and promised to repay every customer who was forced into buying an auto insurance.
Case in point: drivers who bought a car with a loan from Wells Fargo and who let their auto insurance lapse were charged for “forced-place” policies. It enrolled nearly 2 million drivers into such policies of which 25% were not really required, said officials.
Although the OCC does not have a deadline for when it must approve the plan, Wells Fargo cannot complete its work without the all-clear from regulators.
When asked by Democratic Senator Brian Schatz on when Wells Fargo customers should expect a refund for the faulty charges, Otting replied, “I don’t have the particular date in front of me,” while adding, that he trusts OCC employees to push the bank to get the job done correctly.