Wells Fargo Receives Notice in Probe of Mortgage Discounts: Report

Wells Fargo received a "Matter Requiring Attention" notice last year from the Consumer Financial Protection Bureau over its use of mortgage discounts, which are also known as pricing exceptions, CNBC reported on Monday.

Bankers use pricing exceptions in competitive markets to help close deals.

In a 2021 report summarizing the CFPB's findings of supervisory reviews on the industry, the bureau found that Black and female borrowers received fewer pricing exceptions than other customers. Such moves can lower a customer's annual percentage rate by up to 75 basis points, according to CNBC.

It is unknown if Wells Fargo was accused of discrimination or just a lack of oversight over these discounts. The bank hired the law firm Winston & Strawn to question bankers who most frequently used pricing exceptions, according to the sources.

Wells Fargo and the law firm did not immediately respond to requests for comment from The Messenger. However, Wells Fargo told CNBC that "while we cannot comment on any regulatory matters, we don’t discriminate based on race, gender or age or any other protected basis.”

The CFPB declined to comment to The Messenger and CNBC.

This isn't the first time Wells Fargo has been scrutinized by regulators over its lending practices. Late last year, the CFPB fined the bank $3.7 billion for widespread mismanagement of its auto loans and mortgages.

And in 2021, the Office of the Comptroller of the Currency fined Wells Fargo $250 million for what it called "unsound practices" related to its home lending loss mitigation program.

In an earlier action, the bank reached a $184 million settlement in 2012 with the U.S. Justice Department over claims that it charged Black and Hispanic borrowers higher fees and improperly placed them into subprime loans.