Wells Fargo & Co. received Thursday the latest in a series of federal regulatory fines — this time a combined $97.8 million from the Federal Reserve Board and U.S. Treasury Department.
The Fed board fined the bank a total of $67.8 million for what it termed “unsafe or unsound practices relating to historical inadequate oversight of sanctions compliance risks at its subsidiary bank.”
The Treasury’s Office of Foreign Assets Control imposed a $30 million fine to the bank for the same violations.
Wells Fargo said in a statement that it is “pleased to resolve this legacy matter involving conduct that ended in 2015, which we voluntarily self-reported and fully cooperated with OFAC and the Federal Reserve Board to address.”
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The Fed said the “deficient oversight enabled the bank to violate U.S. sanctions regulations by providing a trade finance platform to a foreign bank that used the platform to process $532 million in prohibited transactions” between December 2010 and December 2015.
Wells Fargo had John Stumpf as its chairman and chief executive during that time period.
In January 2020, federal banking regulators ordered a $17.5 million fine against Stumpf for his role in the bank’s fraudulent customer account scandal that erupted in September 2016. Stumpf agreed to a prohibition order, which includes a lifetime ban from the banking industry.
The Fed said in its settlement order with Wells Fargo that the bank provided a trade finance software platform called Eximbills to an unidentified foreign bank.
That bank used the platform to process non-U.S. dollar trade finance instruments outside the U.S. financial system.
The transactions involved “parties in jurisdictions subject ... to sanctions regulations imposed under the International Emergency Economic Powers Act.”
The Fed accused Wells Fargo of violating U.S. Office of Foreign Assets Control regulations by allowing the foreign bank to use Eximbills to process transactions involving parties in jurisdictions subject to OFAC regulations.
Wells Fargo was said to have self-identified the issue in December 2015, stopped the foreign bank from using Eximbills and reported the matter to the Fed Board of Governors and OFAC.
According to the settlement, Wells Fargo no longer offers the trading platform to foreign banks.
The Fed and Treasury enforcement actions are just the latest in a series of regulatory and other federal fines and consent orders for Wells Fargo since September 2016.
During that time period, total regulatory penalties have added up to at least $11.54 billion.
