SAN FRANCISCO — Wells Fargo President and CEO Tim Sloan confirmed on Friday that two federal regulators have floated a $1 billion settlement offer related to issues involving its retrenching auto and mortgage business units.

The executive said he was not at liberty to discuss the settlement offer, which was proffered by the Consumer Financial Protection Bureau (CFPB) and the Office of the Comptroller of the Currency (OCC). At issue are “past practices involving certain automobile collateral protection insurance policies and certain mortgage interest rate lock extensions,” Sloan reported, mirroring language used in news reports.

It is not known whether “protection insurance policies” includes guaranteed asset protection (GAP), a product that has been a source of regulatory anxiety for the bank since August of last year. In the wake of an internal review or external inquiry — reports differ, depending on the source — that found some customers in nine states could be owed refunds, the Federal Reserve Bank of San Francisco filed an official inquest into Wells Fargo’s GAP refund practices.

Wells Fargo has referred to GAP as “protection waiver or insurance agreements” in past statements, but the phrasing used in the most recent press release also could apply to collateral protection insurance (CPI), sales of which the bank ultimately discontinued after an internal review that preceded the GAP inquiry.

Those issues led to the formation of an internal task force; last week, F&I and Showroom reported the task force’s purview had expanded to cover all F&I products sold as part of loans purchased from dealers by the bank. More details about the work performed by internal and external investors in the months since are likely to surface if and when the proposed settlement is made official.

The executive also told investors during the company’s April 13 earnings call that the bank closed a deal to offload “certain assets” of its Puerto Rican subsidiary, Reliable Financial Service Inc. He also offered additional details on the bank’s transformation since its 2016 sales scandal, which led to the firing of the bank’s former head of consumer lending, Franklin Codel, as well as other top officials.

“I’m confident that we are on the right path with the transformation change we are making …” Sloan said. “We have more work to do and it will take time to put all of our challenges behind us, but the result will be a better Wells Fargo for all of our stakeholders.”

In the first quarter, Wells Fargo’s auto finance business originated $4.4 billion in auto loans — a 20% drop from the prior-year period but a slight 2% gain from the fourth quarter of 2017. Loans 30 or more days delinquent increased 12.4% from a year ago to $1.45 billion. Charge-offs also increased, climbing 24.5% to $208 million, while “nonperforming” auto loans, for which the consumer has stopped making payments, inched up to 0.24% of total loans from 0.17% a year ago.

The decline was due to “proactive steps to tighten underwriting,” according to the bank’s official press release. But Sloan said the bank’s auto business will grow again.

“In terms of the loan portfolio, I don't think there is any other significant derisking that we need to do. The auto portfolio continues to decline not because there is really derisking going on, we just have more transformation that is going on in the business and we think that loan portfolio or that business will probably start growing again,” Sloan said, adding that growth in the first half of 2019 “seems reasonable based upon what we are seeing.”

The “transformation” to which Sloan referred includes the sale of loans held by Reliable Financial Services, billed as Puerto Rico’s No. 1 auto financier, to the San Juan-based Banco Popular. A stated purchase price of $1.7 billion includes $1.6 billion in loans sold at an aggregate discount of 4.5%, representing a $176 million loss.

Asked if Wells Fargo had been through the worst of its performance and compliance issues, Sloan struck an upbeat tone, claiming the company, its shareholders, and its customers would ultimately benefit. He pointed to the hiring of several “high-quality leaders,” including Sarah Dahlgren, formerly an official with the Federal Reserve Bank of New York. She was appointed to oversee regulator engagement for the embattled bank.

“We have got some challenges that we are dealing with right now, including the reason that we described our results today as ‘preliminary,’ and we take those issues very seriously,” Sloan said. “But having said all that, we have made a tremendous amount of progress in terms of transforming the company. And so I think we are very far along in the journey, to answer your question specifically. But in terms of declaring victory and walking ahead, we are not quite there yet.”