Trump claims bad actor banks will face consequences, but his actions may say otherwise
Inside Subprime: December 12, 2017
By Andrew Tavin
In response to a Reuters report claiming the Consumer Financial Protection Bureau may no longer require the scandal-laden Wells Fargo to pay additional fees for misconduct, President Trump tweeted that the fines “will not be dropped.”
When it comes to defrauding and otherwise taking harmful actions against both customers and non-customers, Wells Fargo has had quite an eventful past few years. The bank has recently been accused of everything from discriminatory practices to opening millions of fraudulent bank accounts. You can see a full, up to date accounting of their scandals here.
According to a story in the Des Moines Register, newly appointed CFPB acting director Mick Mulvaney is weighing whether to enforce tens of millions of dollars in fines that had been levied against Wells Fargo under the previous director, Richard Cordray. Meanwhile, Mulvaney is facing a challenge from Cordray’s deputy director, Leandra English, for control of the organization. Most recently, a federal judge ruled against English, though she plans to continue appealing that ruling. A group within the CFPB calling itself “Dumbledore’s Army,” is also working to resist the rule of Mulvaney, who, beyond reexamining Wells Fargo’s fees, appears to be pulling back from enforcing standards against financial organizations in general.
President Trump sought to push back against this notion with the following tweet last Friday: “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. I will cut Regs but make penalties severe when caught cheating!”
But while Trump may claim that he wants to hold financial fraudsters accountable for their actions, the idea that regulations will be rolled back while financial organizations will also face increased penalties seems contradictory. Even if one assumes that the promise of higher fines will in fact be realized (not particularly likely based off Trump’s actions in office so far), rolling back too many regulations would mean those higher fines would be unlikely to ever be levied.
While it is theoretically encouraging that condemnation of Wells Fargo’s actions has a bipartisan component, if the will is not there to hold them accountable beyond harsh words, it seems unlikely that the company’s behavior will change significantly.
To read more about Wells Fargo’s recent legal woes, check out these related pages and articles from OppLoans:
- Wells Fargo may face (even more!) fines over insurance and mortgage practices
- What’s up with Wells Fargo? An updated scandal timeline