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Wells Fargo Fined $3.7 Billion by Consumer Financial Protection Bureau

S.J. Steinhardt
Published Date:
Dec 20, 2022

Wells Fargo Bank has been ordered to pay $3.7 billion for its widespread mismanagement of many of its product offerings by the Consumer Financial Protection Bureau.

The CFPB ordered the payment—$2 billion in redress to more than 16 million consumers and a $1.7 billion fine that will go to its Civil Penalty Fund—in response to its finding that the bank “harmed millions of consumers over a period of several years, with violations across many of the bank’s largest product lines.”

“The bank’s illegal conduct led to billions of dollars in financial harm to its customers,” the bureau stated, including losses of homes and vehicles, wrongful dispossession of cars, and misapplications of auto and mortgage loans. The bank also charged unlawful surprise overdraft fees, and applied other incorrect charges to checking and savings accounts.

Its “systematic failures” in servicing automobile loans resulted in $1.3 billion in harm across more than 11 million accounts, the bureau found. Its improper denials of mortgage loan modifications led to some customers losing their homes through wrongful disclosures. Illegal surprise overdraft fees were charged to customers who had sufficient funds in their accounts, and more than 1 million consumer accounts were frozen due to a technical error that could have been overridden.

“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.”

The CGPB also noted that Wells Fargo has previously been the subject of multiple enforcement actions by it and other regulators for such violations as faulty student loan servicing, mortgage kickbacks, unauthorized accounts and harmful auto loan practices.

“As we have said before, we and our regulators have identified a series of unacceptable practices that we have been working systematically to change and provide customer remediation where warranted,” Wells Fargo CEO Charles Scharf said in a statement. “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. … We have made significant progress over the last three years and are a different company today.”

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