(CNN) – Federal regulators on Tuesday fined Wells Fargo $1.7 billion for “widespread mismanagement” over multiple years that damaged more than 16 million consumer accounts. .
The Consumer Financial Protection Bureau said Wells Fargo’s “misconduct” included repeated misuse of loan payments, illegal foreclosure of homes, illegal vehicle returns, misvaluation of fees and interest, and unexpected Said it would include charging an overdraft fee.
The CFPB has ordered Wells Fargo to pay $1.7 billion in civil penalties, in addition to more than $2 billion to compensate consumers for various “illegal acts.”
The misconduct described by the CFPB mirrors previously reported revelations that have come to light about Wells Fargo since the Wells Fargo Bank fake account scandal sparked a national uproar in 2016. increase.
“Wells Fargo’s repeated cycle of breaking the law has damaged millions of American families,” CFPB director Rohit Chopra said in a statement.
Chopra described Wells Fargo as a “habitual offender” and said Tuesday’s fine was just a “first step” to hold the bank accountable. It suggests that you may not be able to get out of the penalty box with
The misconduct described by the CFPB mirrors previously reported revelations that have come to light about Wells Fargo since the Wells Fargo Bank fake account scandal sparked a national uproar in 2016. increase.
In a statement, Wells Fargo emphasized that its extensive settlement with the CFPB resolved multiple issues, most of which had been “unresolved for several years.” The bank said the necessary measures were “already substantially completed”.
“We and our regulators are committed to identifying a range of unacceptable practices, changing them and providing remediation to our customers where appropriate,” Wells Fargo CEO Charlie Scharf said in a statement. “This far-reaching agreement is an important milestone in our efforts to transform Wells Fargo’s business practices and resolve these issues.”
Wells Fargo said it expects the CFPB settlement to cost it $3.5 billion pre-tax in the fourth quarter.
systemic disability
Wells Fargo had a “systematic failure” in its auto lending business that damaged more than 11 million accounts, according to the CFPB’s enforcement action. These failures caused Wells Fargo to wrongly remand some borrowers’ vehicles, improperly charge fees and interest, and fail to refund certain fees, regulators said.
Additionally, regulators say some customers have lost their homes to “fraudulent foreclosures” after Wells Fargo improperly declined thousands of mortgage modifications.
“Banks were aware of the problem for years before they finally addressed it,” the CFPB said.
Wells Fargo has also “illegal” charged overdraft fees and “illegal” frozen over one million consumer accounts, keeping consumers from accessing their funds for at least two weeks on average. Did.
The Wells Fargo scandal that began in 2016 put the spotlight on Wells Fargo’s treatment of its employees and customers, leading to congressional hearings, countless regulatory investigations and the eventual ousting of the bank’s two CEOs. caused
In February 2018, in her final act as chairman of the Federal Reserve, Janet Yellen threw the books at Wells Fargo by imposing unprecedented penalties on banks.
The CFPB said the more than $2 billion in customer refunds Wells Fargo was ordered to pay included more than $1.3 billion to consumers hurt by the bank’s auto lending tactics, as well as illegal surprise overdraft fees and bank account charges. said it included more than $500 million in other fraudulent activities related to
Wells Fargo was also ordered to refund about $200 million to people who damaged the bank’s mortgage repayment accounts, according to regulators.
Going forward, Wells Fargo has been ordered by the CFPB to allow auto borrowers to receive reimbursement of certain surcharges and to stop charging bank account holders unexpected overdraft fees.
According to the agency, these fees are charged when a customer had available funds at the time of purchase, but the balance becomes negative after the transaction is settled.
The-CNN-Wire
™ & © 2022 Cable News Network, Inc., a Warner Bros. Discovery Company. All rights reserved.