Share
Consumer banking giant Wells Fargo agreed to pay $3.7 billion to settle charges that it harmed customers by charging illegal fees and interest on auto loans and mortgages, as well as incorrectly applying overdraft fees against savings and checking accounts.
Wells was ordered to repay $2 billion to consumers by the Consumer Financial Protection Bureau, which also enacted a $1.7 billion penalty against the San Francisco bank Tuesday. It’s the largest fine ever leveled against a bank by the CFPB and the largest yet against Wells, which has spent years trying to rehabilitate its image after a series of scandals tied to its sales practices.
Regulators made it clear, however, that they believe Wells Fargo has further to go on that front.
“Put simply: Wells Fargo is a corporate recidivist that puts one out of three Americans at risk for potential harm,” said CFPB Director Rohit Chopra, in a call with reporters.
The bank’s pattern of behavior has made it necessary for regulators to take additional actions against Wells Fargo that go beyond the $3.7 billion in fines and penalties, Chopra said.
The violations impacted more than 16 million customers, the bureau said. In addition to improperly charging auto loan customers with fees and interest, the bank wrongfully repossessed vehicles in some cases. The bank also improperly denied thousands of mortgage loan modifications for homeowners.
Wells Fargo has been sanctioned repeatedly by U.S. regulators for violations of consumer protection laws going back to 2016, when employees were found to have opened millions of accounts illegally in order to meet unrealistic sales goals. Since then, executives have repeatedly said Wells is cleaning up its act, only for the bank to be found in violation of other parts of consumer protection law, including in its auto and mortgage lending businesses.
Wells paid a $1 billion penalty in 2018 for widespread consumer law violations, the largest against a bank for such violations at the time.
The bank had signaled to its investors that it anticipated additional fines and penalties from regulators and aside $2 billion in the third quarter for that reason.
Wells remains under a Federal Reserve order forbidding the bank from growing any larger until the Fed deems that its problems are resolved. That order, originally enacted in 2018, was expected to last only a year or two.
CEO Charles Scharf said in a prepared statement Tuesday that the agreement with the CFPB is part of an effort to “transform operating practices at Wells Fargo and to put these issues behind us.”
While Wells Fargo tried to frame the agreement with the CFPB as a resolution of established bad behavior, CFPB officials said some of the violations cited in Tuesday’s order took place this year.
“This should not been seen as Wells Fargo has moved past its problems,” Chopra said.
RELATED TOPICS:
Tim Walz Urges Democrats to Fight Back Harder Against ‘Bully’ Trump
1 day ago
Ancient DNA Reveals a New Group of People Who Lived Near Land Bridge Between the Americas
10 hours ago
Cabrera, Three Relievers Combine to Lead Marlins to Win Over Giants
24 hours ago
Spike in Steel Tariffs Could Imperil Trump Promise of Lower Grocery Prices
24 hours ago
Dodgers’ Mookie Betts Out With Broken Toe After Late-Night Bedroom Mishap
24 hours ago
California Gubernatorial Candidate Steve Hilton Vows to Repeal Transgender Athlete Law
1 day ago
Trans Athlete Competes in California Championships in Clovis Despite National Controversy
1 day ago
Tim Walz Urges Democrats to Fight Back Harder Against ‘Bully’ Trump
1 day ago
Ancient DNA Reveals a New Group of People Who Lived Near Land Bridge Between the Americas
10 hours ago
Cabrera, Three Relievers Combine to Lead Marlins to Win Over Giants
24 hours ago
Spike in Steel Tariffs Could Imperil Trump Promise of Lower Grocery Prices
24 hours ago
Dodgers’ Mookie Betts Out With Broken Toe After Late-Night Bedroom Mishap
24 hours ago
California Gubernatorial Candidate Steve Hilton Vows to Repeal Transgender Athlete Law
1 day ago
Trans Athlete Competes in California Championships in Clovis Despite National Controversy
1 day ago
Tim Walz Urges Democrats to Fight Back Harder Against ‘Bully’ Trump
1 day ago
Townsizing? Land Snorkeling? A User’s Guide to the Latest Travel Lingo
9 hours ago
Categories

Townsizing? Land Snorkeling? A User’s Guide to the Latest Travel Lingo

Trump Trade War Has Already Had Huge Effect on California Ports

Cambodian American Chefs Are Finding Success and Raising Their Culture’s Profile. On Their Terms

Ancient DNA Reveals a New Group of People Who Lived Near Land Bridge Between the Americas

Cabrera, Three Relievers Combine to Lead Marlins to Win Over Giants

Spike in Steel Tariffs Could Imperil Trump Promise of Lower Grocery Prices

Dodgers’ Mookie Betts Out With Broken Toe After Late-Night Bedroom Mishap
