Wells Fargo Fined $3.7 Billion in Widespread Illegal Activities

[ZeroHedge] Wells Fargo has been ordered to pay $3.7 billion by the Consumer Financial Protection Bureau (CFPB) for a variety of illegal activity, including wrongfully foreclosing on homes, illegally repossessing vehicles, incorrectly assessing fees and interest, and charging surprise overdraft fees.

The settlement, which includes the largest fine ever imposed by the Consumer Financial Protection Bureau, allows the bank to resolve claims that it had harmed millions of consumers since 2011.

Wells Fargo’s yearslong mistreatment of its customers has resulted in another record-breaking fine and a warning that more restrictions on its ability to do business could soon follow, per The New York Times.

On Tuesday, the bank agreed to pay $1.7 billion in penalties and another $2 billion in damages to settle claims that it engaged in an array of banking violations over the last decade that harmed millions of consumers, the Consumer Financial Protection Bureau said.

The latest developments contribute to a picture, years in the making, of Wells Fargo as one of America’s worst-run big banks.

For decades, the 170-year-old bank has struggled to fix its practices despite run-ins with regulators, even as employees and customers continued to identify new problems.

The consumer protection bureau said Wells Fargo did not record customer payments on home and auto loans properly, wrongfully repossessed some borrowers’ cars and homes and charged overdraft fees even when customers had enough money to cover purchases they made with their bank cards.

Wells Fargo stopped the conduct this year as part of a larger effort to clean up other unlawful practices stretching back to 2011, the filing said.

Wells Fargo Criticism

The fine is the largest ever imposed by the regulator, breaking a previous record of $1 billion, also set by an action against Wells Fargo.

It brings the total penalties the government has levied against the bank for mistreating customers and investors to $6.2 billion since 2016 and almost $20 billion since the financial crisis.

The settlement is the latest development in a series of a crises that led to the ouster of two of the bank’s previous chief executives, John G. Stumpf in 2016 and Timothy Sloan in 2019.

Mr. Sloan took the top post to help clean up the bank’s reputation, which was reeling from self-inflicted scandals, but he became a lightning rod for criticism and was replaced after three years on the job by Charles W. Scharf.

The consumer protection bureau’s director, Rohit Chopra, told reporters on Tuesday that the action against the bank “should not be read as a sign that Wells Fargo has moved past its longstanding problems or that the C.F.P.B.’s work here is done.”

As part of its settlement with the regulator, Wells Fargo has begun repaying customers, returning improperly charged fees and offering some financial relief to those whose finances and credit ratings were hurt by the bank’s practices.

Related: Bank of America Expects a Recession by Q1 of 2023

Follow Frank Nez on Twitter.

Source(s): ZeroHedge, The New York Times

---