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SACRAMENTO, Calif., Feb 5, 2003 (BUSINESS WIRE) -- The Davis Administration
today announced that the Department of Corporations has issued notice of intent
to revoke the residential mortgage lending license of Wells Fargo Home Mortgage,
Inc., because of Wells Fargo's refusal to make refunds after the Department's
routine examination revealed improper charges and inadequate disclosure to
California consumers.

"When Department of Corporations examiners discovered that Wells Fargo Home
Mortgage was making charges not allowed in California, the bank chose not to
make the requested refunds to its mortgage customers," said Commissioner
Demetrios A. Boutris. "Instead, Wells Fargo challenged California's authority in
federal court. On behalf of the consumers of this state who are tired of being
charged hundreds more than they owe by multibillion dollar financial
institutions, we intend to revoke Wells Fargo's license to offer home mortgages
in California."

The Department found two types of violations in its examination of Wells Fargo
Home Mortgage: per diem interest overcharges (a state violation) and a failure
to fully disclose finance charges (a federal Truth in Lending Act violation).
The per diem violation arises when a lender charges more than one day's interest
prior to the recording of the mortgage or deed of trust. In the loans examined,
this resulted in approximately $150 of charges to the borrower per violation.
The second type of violation, a failure to disclose all appropriate charges in
the finance charge calculation, resulted in finance charges being understated by
an average of $613 in the loans where the violation occurred. Since the
Department was only able to examine a fraction of the loans made by Wells Fargo
in 2000 and 2001, Wells Fargo was instructed to take the appropriate steps --
including, presumably, a self-audit -- to make refunds to customers.

Despite having featured their Department of Corporations license for marketing
purposes on printed materials and on their website, Wells Fargo refused to make
refunds and instead claimed that California's authority was preempted by federal
law. Furthermore, Wells Fargo chose not to follow the advisory letter issued by
the regulator of national banks, the Office of the Comptroller of the Currency,
in questions concerning the enforcement of state law. While the letter counsels
national banks to consult with the OCC upon being contacted by a state regulator
looking to enforce state laws, Wells Fargo did not take action until it was
requested to make refunds. The action taken was filing suit in the United States
District Court for the Eastern District of California on January 28, 2003, where
Wells Fargo complained that an audit would cost "several million dollars."

Wells Fargo's (NYSE:WFC) lawsuit seeks exemption for the lender from the
California Residential Mortgage Lending Act. Compared to federal law, this state
law provides several significant protections which are designed to protect
California borrowers from unlawful, deceptive, and fraudulent lending and
servicing activities. Wells Fargo's lawsuit is unrelated to the $38 million
lawsuit filed last month by the Department regarding 15,000 admitted overcharges
by Wells Fargo Financial.

The Department of Corporations is California's Investment and Financing
Authority, reporting to the Business, Transportation and Housing Agency and the
Governor. The Department is responsible for the regulation, enforcement and
licensing of securities, franchises, off-exchange commodities, investment and
financial services, independent escrows, consumer and commercial finance lending
and residential mortgage lending. For further information or to obtain a
complaint form, see the Department's Web site at www.corp.ca.gov or call
1-866-ASK-CORP (1-866-275-2677).



CONTACT: Department of Corporations

Andre Pineda, 916/322-6941



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