Wells Fargo settles CFPB allegations for $3.7 billion

[ad_1]

Wells Fargo on Tuesday agreed to a $3.7 billion settlement with the Consumer Financial Protection Bureau (CFPB) to resolve allegations against the banking giant for misapplied loans, wrongfully seized homes and illegally repossessed vehicles.

The CFPB said it ordered Wells Fargo to pay $2 billion to customers affected by its policies and a $1.7 billion civil penalty for violations of the law.

The settlement resolves allegations of wrongdoing before 2020, when Wells Fargo launched corrective actions after the CFPB forced the company into several consent decrees.

Wells Fargo’s policies over the years have harmed thousands of customers and resulted in billions of dollars in losses, according to the CFPB.

CFPB Director Rohit Chopra said Tuesday’s settlement was an “important first step in the long-term accountability and reform of this repeat offender.”

“Wells Fargo’s rinse-and-repeat cycle of breaking the law has hurt millions of American families,” Chopra said in a statement.

The $1.7 billion civil penalty will go into the federal government’s Civil Penalties Fund, which can be used to compensate victims of harmful policies.

As part of the agreement, the CFPB will end a 2016 consent decree relating to student loan servicing and is working to end a 2018 consent decree relating to home loans and auto loans, according to Wells Fargo.

Wells Fargo CEO Charlie Scharf, who took the job in 2019, said in a statement that management had “identified a series of unacceptable practices” over the years and was “systematically working to change and provide corrective action to customers when warranted”.

“This far-reaching agreement is an important step in our work to transform Wells Fargo’s operating practices and put these issues behind us,” Scharf said Tuesday. “We have made significant progress over the past three years and are a different company today.”

Musk says US has been harmed by Warren’s presence as Senator Biden’s administration finalizes truck pollution reduction rule

One of the charges against Wells Fargo says they denied thousands of people mortgage modifications over a seven-year period, resulting in wrongful foreclosures on homes, the CFPB said.

The bank also charged surprise overdraft fees to customers who had enough money to cover an expense; authorized abusive fees and interest on car loans, sometimes by illegally repossessing vehicles; and froze more than a million consumer accounts based on false flags of fraudulent activity.

Wells Fargo said it has since implemented several harmful policy changes recommended by the CFPB.

[ad_2]