Illustration (pixbay photo)
Federal regulators today (Tuesday) fined the Wells Fargo bank, one of the most famous and well-known in the world, a record amount of 1.7 billion dollars for “widespread mismanagement” over many years that damaged more than 16 million consumer accounts.
The Consumer Financial Protection Bureau said Wells Fargo’s “illegal activity” included repeatedly misapplying loan payments, wrongly foreclosing on homes, wrongfully repossessing vehicles, assessing incorrect fees and interest and charging surprising overdraft fees.
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The CFPB ordered Wells Fargo to pay the $1.7 billion civil penalty in addition to more than $2 billion to compensate consumers for a variety of “unlawful activities.” CFPB officials say it’s the largest penalty the agency has imposed.
The misconduct described by the CFPB echoes previously reported revelations about Wells Fargo since 2016, when the bank’s fake account scandal created a national firestorm. “Wells Fargo’s repeated cycle of lawlessness has harmed millions of American families,” Rohit Chopra, director of the CFPB, said in a statement.
In a statement, Wells Fargo emphasized that the wide-ranging settlement with the CFPB resolves a number of matters, most of which have been “outstanding for several years.” The bank said the required actions “have already been substantially completed. We and our regulators have identified a series of unacceptable practices that we have worked systematically to change and provide remediation to customers where requested,” said Wells Fargo CEO Charlie Scharf. “A far-reaching agreement This is an important milestone in our work to change operating practices at Wells Fargo and put these issues behind us.”
According to the CFPB’s enforcement action, Wells Fargo had “systemic failures” in its auto loan business that affected more than 11 million accounts. Those failures caused Wells Fargo to illegally repossess borrowers’ vehicles, charge improper fees and interest and not refund certain fees, regulators say. Moreover, regulators allege that Wells Fargo improperly denied thousands of mortgage loan modifications, causing some customers to lose their homes in “false foreclosures.”
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