Wells Fargo faces $1-bn fine from regulators for auto, mortgage loan issues

Wells Fargo & Co has been offered a penalty of $1 billion by regulators to resolve outstanding investigations related to auto insurance and mortgage lending abuses, the third-largest US bank by assets said on Friday.

Reuters reported on Monday that the Consumer Financial Protection Bureau and Office of the Comptroller of the Currency were preparing a fine of up to $1 billion for Wells Fargo's auto insurance and mortgage lending abuses.

The bank said it may have to revise its quarterly results to reflect the final settlement.

"The CFPB and OCC have collectively offered to resolve for an aggregate of $1 billion in civil money penalties," the bank said in a statement.

US jobless claims down 5,000, labour market tightens

The number of Americans filing for unemployment benefits fell last week, pointing to a tightening labor market that likely keeps the Federal Reserve on course to announce plans next month to start reducing its massive bond portfolio.

Labor market strength was also underscored by another report on Thursday showing US-based employers in July announced the fewest job cuts in eight months.

"The labor market remains tight as a drum even if it is not throwing off the sparks of higher wages and more inflation," said Chris Rupkey, chief economist at MUFG in New York. "The Fed can continue mopping up the stimulus provided to fight the financial crisis and recession."

Initial claims for state unemployment benefits decreased 5,000 to a seasonally adjusted 2,40,000 for the week ended July 29, the Labor Department said. Economists had forecast claims falling to 242,000.

Claims have now been below 300,000, a threshold associated with a healthy labour market, for 126 straight weeks. Thatis the longest such stretch since 1970, when the labour market was smaller. The labour market is near full employment, with the thejobless rate at 4.4 percent.

Economists believe that labour market tightness will encourage the Fed to announce a plan to start offloading its $4.2 trillion portfolios of Treasury bonds and mortgage-backed securities in September.
READ MORE

US jobless claims rise from three-month low

The number of Americans filing for unemployment benefits rebounded from a three-month low last week, but remained below a level consistent with a tightening labor market.

Initial claims for state unemployment benefits increased 10,000 to a seasonally adjusted 244,000 for the week ended July 22, the Labor Department said on Thursday.

Data for the prior week was revised to show 1,000 more applications received than previously reported.

Economists polled by Reuters had forecast claims rising to 241,000. It was the 125th straight week that claims remained below 300,000, a threshold associated with a robust labor market. That is the longest such stretch since 1970, when the labor market was smaller. The labor market is near full employment, with the jobless rate at 4.4 percent.

Claims have been volatile in recent weeks as automakers shut assembly plants for annual retooling. Some manufacturers like General Motors are extending their summer shutdowns to manage excess inventory from declining sales.

Economists say this could be throwing off the model used by the government to strip out seasonal fluctuations from the data, causing swings in the weekly numbers.

A Labor Department official said there were no special factors influencing the claims data and that no states had been estimated.
READ MORE