Wells Fargo fined $3.7bn for loan, mortgage and deposit mismanagement
The US Consumer Financial Protection Bureau (CFPB) has fined Wells Fargo $3.7 billion for “widespread mismanagement” of auto loans, mortgages and deposit accounts.
CFPB slaps Wells Fargo with $3.7bn fine
The regulator has ordered Wells Fargo to pay more than $2 billion in redress to 16 million affected consumers and a $1.7 billion civil penalty for legal violations across several of its largest product lines.
The CFPB alleges the bank’s illegal conduct led to billions of dollars in financial harm to its customers and, for thousands of customers, the loss of their vehicles and homes.
Additionally, consumers were illegally assessed fees and interest charges on auto and mortgage loans, had their cars wrongly repossessed, and had payments to auto and mortgage loans misapplied by the bank.
Wells Fargo also charged consumers unlawful surprise overdraft fees and applied other incorrect charges to checking and savings accounts. Under the terms of the order, Wells Fargo will pay redress to the over 16 million affected consumer accounts, and pay a $1.7 billion fine, which will be used to provide relief to victims of consumer financial law violations.
CFPB Director Rohit Chopra says the refund worth billions of dollars is “an important initial step for accountability and long-term reform of this repeat offender”.
“Wells Fargo’s rinse-repeat cycle of violating the law has harmed millions of American families,” Chopra adds.
