April 20 (UPI) -- Wells Fargo will pay $1 billion fine to settle claims of abuses -- that include the bank forcing customers into car insurance and charging mortgage borrowers fees, federal regulators announced Friday.
The bank was found to have charged nearly 600,000 customers for insurance they didn't need, which led to about 20,000 repossessions, investigators said.
The Bureau of Consumer Financial Protection announced the settlement Friday in a coordinated action with the Office of the Comptroller of the Currency. It matches the largest-ever fiscal penalty from the OCC, and is a record for the CFPB.
"I am especially pleased that we were able to work closely and effectively with our colleagues at the OCC, and I appreciate the key role they played in the negotiations," CFPB Acting Director Mick Mulvaney said in a statement.
"As to the terms of the settlement: we have said all along that we will enforce the law. That is what we did here."
The Bureau said Wells Fargo violated the Consumer Financial Protection Act in the way it administered a mandatory insurance program related to vehicle loans. Additionally, the federal regulator found the bank violated the law in how it charged borrowers for mortgage interest rate-lock extensions.
San Francisco-based Wells Fargo said in a statement it will adjust its first quarter 2018 preliminary financial results by an additional accrual of $800 million, as a result of the penalties -- reducing their net income to $4.7 billion.
This will be the second straight quarter that legal costs hurt Wells Fargo's earnings after the bank was hit with a $3.25 billion charge in the fourth quarter related to regulatory investigations.
"For more than a year and a half, we have made progress on strengthening operational processes, internal controls, compliance and oversight, and delivering on our promise to review all of our practices and make things right for our customers," Wells Fargo CEO Timothy Sloan said.
"Our customers deserve only the best from Wells Fargo, and we are committed to delivering that."