WASHINGTON_President Donald Trump Friday denied a report that the federal consumer financial watchdog might drop sanctions against Wells Fargo & Co. for alleged mortgage lending abuses and said the bank could face even tougher penalties.
Trump's response was to a Reuters report that Mick Mulvaney _ installed last month as acting director of the independent Consumer Financial Protection Bureau _ was reviewing whether Wells Fargo should pay tens of millions of dollars in penalties for charging fees to certain homebuyers to secure low mortgage rates.
On Twitter, Trump said "fines and penalties against Wells Fargo Bank for their bad acts against their customers and others will not be dropped" and declared the Reuters report incorrect. If anything, he said, fines and penalties will be "substantially increased."
He renewed his promise to cut regulations, which he and congressional Republicans have been doing in recent months, but said he would "make penalties severe" when companies are "caught cheating."
Representative of Mulvaney and Wells Fargo did not respond to requests for comment.
The consumer bureau was created in 2010 by the Dodd-Frank Act and is designed to be an independent agency free from presidential interference. The president appoints the director, who also needs confirmation from the Senate and then cannot be removed except for cause during a five-year term.
The bureau's first director, Richard Cordray, resigned Nov. 24. He promoted his chief of staff, Leandra English, to deputy director and said she would be acting director under a Dodd-Frank provision.
Within hours of Cordray's resignation announcement, Trump appointed Mulvaney to fill the post under the Federal Vacancies Act of 1998. That set off a legal battle. On Wednesday, English asked a federal judge for an injunction to install her as the agency's acting chief instead of Mulvaney.
U.S. District Judge Timothy J. Kelly denied English's request last week for a temporary restraining order to remove Mulvaney.
Wells Fargo, one of the nation's largest banks, has been under fire for a series of scandals, including creating millions of accounts in customers' names without those customers' knowledge or consent. It also has been accused of forcing auto-loan customers into unneeded insurance policies and charging improper fees to some mortgage borrowers.
The Los Angeles Times reported in July on a wrongful-termination lawsuit by a former Wells Fargo mortgage banker who alleged that the San Francisco bank falsified records so it could blame mortgage-processing holdups on borrowers. The banker said Wells Fargo fired him for trying to report the practice.
Accusations of improper mortgage fees also have been the subject of a class-action lawsuit, and the bank reported in August that the consumer bureau was investigating the matter. Wells Fargo has acknowledged that the controversy was a factor in a shake-up of the bank's mortgage division.
In October, Wells Fargo said it would refund "rate-lock extension" fees to some mortgage borrowers whose delays in completing mortgage applications were primarily the bank's fault. The fees in question were charged from Sept. 16, 2013, through Feb. 28, 2017.
The fees are supposed to be charged only when borrowers do not finish their paperwork on time and want to retain the interest rate that initially was quoted for the loan.
Wells Fargo said that roughly $98 million in extension fees were assessed to about 110,000 borrowers during that period, but it thinks a substantial number of the fees were appropriately charged. The bank said the amount to be refunded probably would be lower because not all the fees assessed were actually paid and some fees already have been refunded.
Reuters reported Thursday that the consumer bureau had accepted an internal review from Wells Fargo and set settlement terms in early November. But that matter and about a dozen others were now in question, it said, because Mulvaney said he was reviewing the bureau's work.
