Wells Fargo & Co. has increased for at least the third time the amount of money it needs to set aside for a potential accruals shortfall related to potential losses from legal actions.

The bank reported on page 118 in its second-quarter regulatory filing Friday that the high end of its latest shortfall estimate is $3.9 billion as of June 30.

The previous high-end estimate was $3.1 billion as of March 30. The current amount is nearly double the $2.2 billion projected as of Sept. 30.

The bank said the additional $800 million during the second quarter was related “to a variety of matters, including retail sales practices matters.”

“Wells Fargo is unable to determine whether the ultimate resolution of the retail sales practices matters will have a material adverse effect on its consolidated financial condition,” the bank said.

The bank recently said it is involved in “preliminary and/or exploratory resolution discussions” with the U.S. Justice Department and the Securities and Exchange Commission about its retail sales practices.

On June 7, Wells Fargo announced it has agreed to pay at least $386 million to settle a 2017 class-action lawsuit addressing its auto collateral-protection insurance practices. The amount is more than six times the $64 million that Wells Fargo initially agreed to pay in July 2017 to settle the lawsuit.

According to the Financial Web website, collateral-protection insurance is defined as a policy that protects auto-loan lenders from financial losses resulting from having to pay claims when the vehicle owner does not have auto insurance.

CPI allows lenders to cover the claims without losing any money. In most cases, the insurance cost is built into the borrower’s loan, sometimes without the borrower’s knowledge, as it appears may have been the case with Wells Fargo customers.

Altogether since the fall of 2016, Wells Fargo has agreed to pay more than $4 billion to settle various regulatory disputes, including $2.09 billion announced in August 2018, $1 billion announced in April and $575 million in December.

To put those fines into perspective, the bank had net income of $5.85 billion in just the second quarter of fiscal 2019.

National General Insurance Co. agreed to pay $7.5 million for its role with the CPI products. Both parties have denied wrongdoing.

The settlement was made to “resolve claims that defendants engaged in an unlawful scheme to force (tens of) millions of Wells Fargo auto loan customers to pay for unnecessary and unwanted collateral protection insurance.”

The class-action period is Oct. 15, 2005, to Sept. 30, 2016 — the latter date being a couple of weeks after Wells Fargo’s fraudulent customer-account scandal surfaced that has affected at least 3.5 million retail customers.

The biggest shadow hanging over Wells Fargo is the Federal Reserve’s order, issued Feb. 3, 2018, that does not allow the bank to increase its total assets beyond the $1.93 trillion it had on Dec. 31, 2017. Sloan said Jan. 15 that the cap will remain in place through at least the end of 2019.

rcraver@wsjournal.com 336-727-7376 @rcraverWSJ

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