Wells Fargo and the Consumer Financial Protection Bureau reached a $3.7 billion settlement involving customer abuses related to checking accounts, mortgages, and auto loans, with some of the misconduct occurring as recently as this year.
The business was sentenced to pay a record-breaking $1.7 billion civil penalty and more than $2 billion to 16 million customers, according to a statement from the CFPB. The San Francisco-based bank stated in a separate statement that many of the settlement's "necessary activities" have already been accomplished.
"The bank's illegal behavior caused billions of dollars in financial harm to its customers, and thousands of customers lost their automobiles and homes," the agency said in a press release. The bank improperly charged fees and interest on auto and mortgage loans, wrongfully seized consumers' vehicles, and misapplied payments to auto and mortgage debts.
The breadth of malfeasance outlined by the CFPB demonstrates that Wells Fargo had trouble servicing clients far before the 2016 incident involving millions of bogus accounts. In contrast to rivals JPMorgan Chase and Bank of America, Wells Fargo, the fourth-largest U.S. bank by assets, has a very limited Wall Street business, meaning that its primary customers are average Americans.
Some of these problems persisted until very recently. According to a settlement agreement, from "at least 2011 until 2022," the bank misapplied vehicle loan payments and other other errors, some of which resulted to improper auto repossessions. In addition, the bank committed errors in mortgage modification applications from 2011 to 2018, according to the CFPB.
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