Wells Fargo faces probe on low-income tax credit purchases
Wells Fargo’s purchase of low-income housing tax credits is being probed by federal government agencies.
The agencies, which the company didn’t identify, are looking into the way Wells Fargo “purchased, and negotiated the purchase of, certain federal low-income housing tax credits in connection with the financing of low-income housing developments,” the San Francisco-based bank said Friday in a filing.
This disclosure marks the latest federal inquiry into Wells Fargo’s conduct. Incorrect fees in the firm’s wealth management unit, inconsistent pricing in the foreign-exchange business, and employees improperly altering documents in the wholesale unit are among other government inquiries at the bank.
In February, the Federal Reserve slapped Wells Fargo with a punitive growth ban, in effect until the bank cleans up its act to the regulator’s satisfaction. Chief Executive Officer Tim Sloan has said the bank is committed to making the changes necessary to enhance operational and compliance risk.
The lender said in Friday’s filing that “reasonably possible” legal charges could be as high as $2.2 billion beyond reserves as of June 30. That’s down from $2.6 billion in the previous quarter.