Wells Fargo was ordered Tuesday to pay $3.7 billion in customer redress and fines. File Photo by Larry W. Smith/EPA-EFE
Dec. 20 (UPI) -- The Consumer Financial Protection Bureau said on Tuesday that it is ordering Wells Fargo Bank to pay more than $2 billion to consumers and a $1.7 billion civil penalty for legal violations across several of its largest product lines.
The bureau said Well Fargo's conduct led to billions in financial harm to its customers, including the loss of their vehicles and homes. The bank illegally assessed fees and interest charges on auto and mortgage loans that led to wrongful repossession.
The bank also had payments to auto and mortgage loans misapplied. The bureau said Wells Fargo charged consumers unlawful surprise overdraft fees and applied other incorrect charges to checking and savings accounts.
Wells Fargo will now pay to redress more than 16 million affected consumer accounts and pay a $1.7 billion fine, which will go to the CFPB's Civil Penalty Fund.
"Wells Fargo's rinse-repeat cycle of violating the law has harmed millions of American families," said CFPB Director Rohit Chopra. "The CFPB is ordering Wells Fargo to refund billions of dollars to consumers across the country. This is an important initial step for accountability and long-term reform of this repeat offender."
In its own statement, Wells Fargo said its current leadership has made significant progress to transform the bank. It claimed the CFPB recognized that since 2020, the company has accelerated corrective actions and remediation to address the issues in the settlement
"The company is pleased to bring closure to these issues," Wells Fargo said in a statement. "As part of the settlement, Wells Fargo entered into a consent order, which lays out a path to termination after the company completes the remainder of the required actions."
Wells Fargo CEO Charlie Scharf said its own regulators identified a series of "unacceptable practices" that the bank has been working systematically to change.
"This far-reaching agreement is an important milestone in our work to transform the operating practices at Wells Fargo and to put these issues behind us," Scharf said. "Our top priority is to continue to build a risk and control infrastructure that reflects the size and complexity of Wells Fargo and run the company in a more controlled, disciplined way."
