Trump promises to pursue Wells Fargo fraud with 'severe' penalties

Gregory Korte | USA TODAY

WASHINGTON — President Trump promised Friday to pursue banks found to have committed fraud against their customers, disputing reports that his administration would backtrack on a $100 million fine levied against banking giant Wells Fargo.

"Fines and penalties against Wells Fargo Bank for their bad acts against their customers and others will not be dropped, as has incorrectly been reported, but will be pursued and, if anything, substantially increased," he tweeted. "I will cut Regs but make penalties severe when caught cheating!"

Trump's statement follows a report by the Reuters news agency, quoting three anonymous officials, that the Consumer Financial Protection Bureau was reconsidering the $100 million fine levied against the San Francisco-based bank.

The consumer watchdog agency is undergoing an upheaval after its Obama-appointed Director, Richard Cordray, resigned to run for Ohio governor last month. Trump installed his budget director, Mick Mulvaney, as the acting director.

Mulvaney is a longtime critic of the agency, complaining that it was set up by Congress to be unaccountable to elected officials. But on his first day at the CFPB last month, he said he was also committed to enforcing the law.

More: What does Mulvaney's appointment mean for the future of CFPB?

"I was disturbed by what happening with Wells Fargo," Mulvaney said on his first day at the agency last month. "CFPB gets a lot of credit for fining Wells Fargo. My question is, why did they miss it?"

In September, the CFPB fined the nation's third largest bank for secretly opening new accounts for customers, often charging them fees for products they never ordered or agreed to. The agency found that the illegal sales practices began in 2011.

Trump's statement Friday is in contrast to previous statements that seemed to side with complaints from Wall Street that the agency was stifling lending and could impair the economic recovery.

"Financial Institutions have been devastated and unable to properly serve the public. We will bring it back to life!" Trump tweeted last month after naming Mulvaney as acting director.

More: Siding with Trump, judge rules Mick Mulvaney to remain interim CFPB head