Wednesday 21 August 2019

Irish arm of Wells Fargo fined €5.8m

Central Bank hands out second-biggest fine after reporting and compliance failings

Wells Fargo's breaches include a failure to accurately report the firm's capital position and to comply with requirements in relation to liquidity testing. Photo: PA
Wells Fargo's breaches include a failure to accurately report the firm's capital position and to comply with requirements in relation to liquidity testing. Photo: PA
Ellie Donnelly

Ellie Donnelly

The Central Bank has fined US lender Wells Fargo's Irish unit €5.8m for "serious failings" in relation to its regulatory reporting and compliance.

It is the second-biggest fine ever imposed by the Irish regulator, after Permanent TSB's €21m penalty arising from the tracker mortgage scandal.

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Wells Fargo's breaches include a failure to accurately report the firm's capital position and to comply with requirements in relation to liquidity testing.

The breaches, which the firm admitted to, varied in duration and time, from January 1, 2014 to February 28, 2019.

The Central Bank found "serious and systemic failings" in Wells Fargo's regulatory reporting capability - including failure to calculate and report accurately its capital position, and failure to periodically monetise a sample of liquid assets, as required in legislation. The bank admitted to weak governance arrangements including a lack of robust board and senior management oversight.

The regulator also found that Wells Fargo had inadequate internal control mechanisms, including a failure to properly document processes and procedures.

The Central Bank determined an appropriate fine of €8.4m, which was reduced by 30pc in accordance with the settlement discount scheme provided for in the Central Bank's Administrative Sanctions Procedure.

Seána Cunningham, the Central Bank's director of enforcement and anti-money laundering, said: "Wells Fargo Bank International Unlimited Company's serious failings are of concern to the Central Bank, and indicate that there was a poor compliance culture as it pertained to regulatory reporting."

Since 2006, the Central Bank has imposed fines across the financial sector of over €96m.

A Wells Fargo spokesperson said: "WFBI takes its regulatory obligations seriously and we are committed to complying fully with regulatory requirements.

"These events concerned regulatory reporting and did not affect our customers. We have made significant improvements to our systems, processes and resources for regulatory reporting to the Central Bank of Ireland since these events."

Irish Independent

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