Wells Fargo fined in Ireland over reporting breachesPosted On: Jul. 5, 2019 8:57 AM CST
(Reuters) — Wells Fargo & Co.’s Irish subsidiary was fined €5.9 million ($6.7 million) on Friday for a prolonged series of regulatory reporting breaches, the second-largest fine ever handed down by Ireland’s Central Bank.
The Central Bank said Wells Fargo Bank International Unltd. Co. admitted to five breaches from 2014 to 2019, including a failure to accurately report its capital position that revealed “serious and systemic weaknesses” in its reporting capability.
A spokesperson for Wells Fargo said the bank took its regulatory obligations seriously and had made significant improvements to its systems and processes since the breaches occurred.
Wells Fargo, the fourth-largest U.S. bank by assets, has been beset by a string of mis-selling scandals in its home market, prompting billions of dollars in fines and an unprecedented cap on its balance sheet by the Federal Reserve.
Its Irish incorporated business has branches in London and Frankfurt, offering corporate lending across Europe, according to the bank’s website. It had a turnover of $586 million in 2018, the central bank said.
“It is a minimum requirement of being regulated by the Central Bank that firms submit accurate and timely regulatory returns,” Director of Enforcement Seana Cunningham said in a statement. “This enforcement action refers to failings in relation to both capital reporting and liquidity testing. For that reason it is considered to be particularly serious.”
The other breaches included a failure to properly document processes and procedures, the lack of robust board and senior management oversight and a failure to comply with regulatory requirements in relation to liquidity testing.
Weak information technology systems also necessitated an excessively high level of manual adjustments in the preparation of regulatory returns, which the central bank said contributed to incorrect calculations.
Wells Fargo initially did not complete required remedial action in 2017 but has since taken the necessary steps to rectify the failings, the regulator said.
That reduced the fine from the “appropriate level” of €8.4 million, in line with central bank settlement procedures. The €5.9 million fine is the second largest after a €21 million fine imposed on Irish lender Permanent TSP for overcharging mortgage customers, a central bank spokesman said.
It was also the second reprimand for an Irish subsidiary of a major U.S. bank in the space of 10 days after JPMorgan Chase & Co. was fined €1.6 million for regulatory breaches in outsourcing.