Crisis

Wells Fargo Adds $1 Billion to Possible Legal Cost

Wells Fargo & Co. additional $1 billion in the third quarter to exactly what it says the bank could face in possible legal expenses.

Legal costs could potentially be $3.3 billion more than what the San Francisco-based bank has reserved, Wells Fargo said Friday in a regulatory filing. While that figure was unchanged from the previous period, it constitutes a $1 billion increase because Wells Fargo moved a similar sum into reserves during the period.

The bank announced a surprise $1 billion charge in the third quarter to get a previously disclosed regulatory analysis into its pre-financial crisis mortgage activity when it reported third quarter earnings. Funds move into an accrual when they determine there is a cost longer & #x 201D & #x 201C; fairly possible; and instead becomes probable.

Ancel Martinez declined to comment about the rise.

Wells Fargo said in Friday’s filing that the $3.3 billion estimate declined by what was moved to the accrual, but was subsequently “offset from the possibility of greater risk in many different matters, for example, company’s existing mortgage-related regulatory investigations. ” Chief Financial Officer John Shrewsberry said in an interview a month that the bank would achieve a settlement with authorities over the mortgage dilemma in “probably quarters or months. ” He declined to say how big the settlement could be.

Wells Fargo also said that it is going to pay $130 million — or $50 million over previous estimates — to auto customers who were billed for insurance that was unwanted. The updated amount includes $100 million in money remediation and $30 million in alterations to customers who’d the insurance added to their account following Oct. 15, 2005, according to the filing. Wells Fargo had said in July it’d pay hurt clients $80 million.

The Office of the Comptroller of the Currency criticized the bank for forcing borrowers to buy unneeded car insurance when they took out car loans, the New York Times reported previous month. That preliminary report said the bank underestimated that it hadn & #x 2019; t looked far enough back for injury, and how much it’d cost to reimburse customers.

    Read more: http://www.bloomberg.com/

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