The Irish central bank has issued a record fine to Wells Fargo for reporting failures by its Irish subsidiary, citing the bank's weak IT systems.
The Central Bank of Ireland (CBI) has slapped a €5.9 million penalty on Wells Fargo Bank International Unlimited Company (WFBI), the second biggest fine it has ever issued, for what it called a prolonged series of regulatory reporting breaches and "serious and systemic weaknesses" in its reporting systems.
Wells Fargo admitted to five breaches between 2014 and 2019 that led it misreport is capital position. A statement from the bank said that it took its reporting responsibilities seriously and has made siginificant improvements to its systems and processes since the breaches were uncovered.
“WFBI takes its regulatory obligations seriously and we are committed to complying fully with regulatory requirements," read the statement. "These events concerned regulatory reporting and did not affect our customers. We have made significant improvements to our systems, processes and resources for regulatory reporting to the CBI since these events. We have also integrated continuous review and improvement into how we operate to ensure that our regulatory reporting to the CBI continues to be complete, timely and accurate.”
It is yet another regulatory penalty for the bank which has faced a number of mis-selling scandals in its home market in the US. It is also another penalty issued by the CBI to a US bank following the €1.8 million fine handed down to JP Morgan for outsouricng breaches.
A statement issued by the CBI's director of enforcement Seana Cunningham said that the Wells Fargo enforcement action related to "failings in relation to both capital reporting and liquidity testing" and "for that reason it is considered to be particularly serious".
She added that weak IT systems requiring an excessively high level of manual adjustments in the preparation of regulatory returns had contributed to incorrect calculations. But, despite failing to take action in 2017, Well Fargo's consequent work to rectify the failings led the CBI to reduce the inital fine from €8.4 million to €5.9 million.