Wells Fargo has agreed to pay $3.7 billion in fines and damages to settle allegations that, among other things, it wrongfully seized homes, illegally confiscated vehicles and claimed surprise overdraft fees.
The U.S. Consumer Financial Protection Bureau said on Tuesday that the bank’s activities have “harmed millions of American families” and described the payment as “an important first step towards accountability and long-term reform.”
The CFPB said about $2 billion would be spent to reimburse the more than 16 million consumer accounts affected, adding that an additional $1.7 billion was set aside for the agency’s Civil Penalty Fund and that it would assist victims of consumer financial law violations.
In a statement, the CFPB said that Wells Fargo found:
- He suffered systematic failures in the service of auto loans and unfairly confiscated the vehicles of the borrowers.
- In some cases, “thousands of mortgage loan changes were improperly refused”, which led customers to lose their homes to unjustified foreclosures.
- Unlawful surprise overdraft fees were charged for ATM withdrawals and debit card transactions.
- It illegally froze consumer bank accounts, making these customers inaccessible to their money for an average of at least two weeks.
Wells Fargo did not immediately respond to a request for comment after normal business hours on Tuesday, but CEO Charlie Scharf said on its website that the bank is working with regulators to systematically rectify and correct “unacceptable practices” at the company. customers “where guaranteed.”
Describing the deal as “an important milestone in our work to transform business practices and leave these challenges behind at Wells Fargo,” Scharf said, “We’ve made significant progress over the past three years, and today we’re a different company.”
The bank has been battling problems for years and is facing conflicts with regulators. A fake account scandal made headlines in 2016, and the bank has since lost two CEOs.
“Over the past few years, Wells Fargo executives have taken steps to address longstanding issues,” CFPB director Rohit Chopra said on Tuesday, but the $3.7 billion payment “should not be read as a sign that Wells Fargo has outgrown its past.” longstanding issues or the CFPB’s job here is done.”