Wells Fargo & Co., reeling from a scandal over fake accounts that erupted in September, said it’s wrapping up an expanded review of that issue, while facing new probes and higher potential legal costs.
The bank must “go beyond what has been asked of us by our regulators by reviewing all of our operations — leaving no stone unturned — so we can be confident we have done all that we can do to build a better, stronger Wells Fargo,” Chief Executive Officer Tim Sloan said in a statement Friday.
The Consumer Financial Protection Bureau is looking at whether consumers were “unduly harmed” by the bank freezing and closing accounts that had suspected fraudulent activity, the San Francisco-based bank said Friday in a regulatory filing. Wells Fargo also said in the filing that issues in its auto lending business may spark investigations, even beyond the practice of forcing unwanted insurance onto customers that the company disclosed last month.
The expansion of its fake-accounts review to include three more years and a new methodology in finding affected customers will probably lead to a “significant increase” in cases, the bank said. The lender aims to have its consultant complete the review by the end of this quarter and doesn’t expect the incremental costs from reimbursing more customers to have a major financial impact.
Shares of the lender dropped 1.7 percent to $52.52 at 3:30 p.m. in New York, reversing an earlier increase. That was the biggest decline in the 24-company KBW Bank Index.