Wells Fargo close to US$1b US settlement: reports

[NEW YORK] Wells Fargo is close to paying US$1 billion to settle a US probe over its risk management policies in another blow to the banking giant, US media reported on Thursday.

The settlement, which could come as soon as Friday, would cover problems uncovered in the mortgage and auto lending businesses, according to The Wall Street Journal, which cited people familiar with the matter.

The New York Times and The Washington Post also reported that a US$1 billion settlement was close at hand.

Wells Fargo itself said last Friday in its earnings press release that regulators from the Consumer Financial Protection Bureau and Office of the Comptroller of the Currency have proposed US$1 billion in penalties to resolve the investigations but that there was not yet a final resolution.

The penalty is the latest regulatory problem to befall Wells Fargo, which also came under fire from investors and lawmakers over a fake account scandal. The Federal Reserve, in an unprecedented move, in February ordered the bank to halt its expansion until it improves governance, following "persistent misconduct."

The bank, once the world's largest by market capitalisation, will face its own shareholders on Tuesday at an annual meeting in Iowa. Bank executives were on the receiving end of blistering criticism at last year's annual meeting at which several board members scraped to re-election.

Four board members announced in March they would resign after this year's meeting.

AFP