Oct. 3 at 3:59 PM
$WFC Wells Fargo’s decision to pilot 150% loan-to-value ratios for subprime auto borrowers while the used car market buckles under record inventory and affordability collapse suggests a stunning disregard for both borrower welfare and its reputation risk. Reminder: WF has paid over
$27 billion in cumulative fines and settlements since 2000, including a
$1.2 billion DOJ settlement for falsely certifying FHA loans, a
$3 billion federal penalty in 2020 for its fake accounts scandal, and a
$1 billion CFPB/OCC fine in 2018 for auto loan abuses like force-placed insurance. These penalties span mortgage fraud, consumer protection violations, and toxic securities abuses, reflecting a long history of predatory practices. To now push deeply negative equity loans on credit-strained consumers..some with FICO scores as low as 500 while affordable used inventory vanishes and turnover slows, is not innovation but institutional relapse.
