Wells Fargo has agreed to a $3.7 billion deal with regulators to settle charges that it took advantage of customers on their auto loans, mortgages and bank accounts.
The Consumer Financial Protection Bureau said for some customers the bank’s wrongdoing had especially dire consequences.
People had their cars wrongfully repossessed by Wells Fargo and the bank took actions that resulted in borrowers wrongfully losing their homes, according to the order from the CFPB. Others customers were charged improper overdraft fees on their checking accounts.
“Wells Fargo’s rinse-repeat cycle of violating the law has harmed millions of American families,” said CFPB Director Rohit Chopra. The bureau says the wrongdoing goes back more than a decade, with some of it continuing into this year. “The CFPB is ordering Wells Fargo to refund billions of dollars to consumers across the country,” Chopra said.
Under the terms of the order, Wells Fargo will pay $2 billion to millions of customers who were harmed. The bank will also pay a $1.7 billion fine.
A CFPB official speaking on background said customers who lost their cars after they were wrongfully repossessed will receive a base amount of $4,000 each, and could receive more money depending on the particulars of their case.
Wells Fargo’s CEO Charlie Scharf said in a statement, “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.”
The bank framed the settlement as a way to move forward and reform the company’s scandal-ridden past.
“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,” said Scharf. “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.”
Over the past decade the bank has endured a series of high profile and embarrassing debacles, including the revelations NPR reported on in 2016 that the banks hyper-aggressive internal sales pressure had resulted in bank employees opening millions of checking, debit, and credit card accounts for customers without their knowledge, in order for the employees to meet their sales goals.
CFPB director Chopra said this latest enforcement action is an important step, “for accountability and long-term reform of this repeat offender.”
Under the order the CFPB says Wells Fargo is required to reach out to customers who were harmed and eligible for reimbursement. The bureau says customers who are experiencing ongoing problems with Wells Fargo, or other financial providers, can submit complaints by visiting the CFPB’s website.