U.S. government regulators ordered Wells Fargo in June to pay $3.7Billion in fines, and to refund customers. This was the largest fine against Wells Fargo so far, following a number of financial mismanagement allegations.
Consumer Financial Protection Bureau (CFPB), alleged the bank illegally charged interest and fees on auto loans and loans for mortgages, wrongly repossessed vehicles and misapplied payments to mortgage and auto loans. The watchdog agency claimed that Wells Fargo added illegal charges to savings and checking accounts, and charged customers surprise overdraft fees.
Wells Fargo, who has spent many years trying to rehabilitate its business after a series scandals related to sales practices, will pay a $1.7 Billion fine to CFPB. The remaining $2B will go towards compensating the more than 16,000,000 customers who were adversely affected by the “illegal behavior,” the agency stated. said Tuesday.
Rohit Chopra, Director at CFPB, said that Wells Fargo violates the law in a “repeat-and repeat” cycle.
History of repeated violations
Wells Fargo stated Tuesday that the settlement reached with the CFPB will correct “unacceptable behaviors” that had been lingering at the bank for several years.
U.S. regulators repeatedly sanctioned Wells Fargo over violations of consumer protections law dating back to 2016, when Wells Fargo employees were discovered to have opened illegally millions of accounts in order to reach unrealistic sales goals. Wells Fargo spent much of its time claiming that it was cleaning up its act. However, Wells was still fined repeatedly for violations of consumer protection laws.
CEO Charlie Scharf said, “We and our regulators have identified unacceptable practices that we have been systematically working to change and provide customer remedy where warranted.” said In a statement Tuesday.
He said that the agreement would “put all these issues behind us.”
This report was compiled by the Associated Press.