Wells Fargo & Co has settled with the Consumer Financial Protection Bureau (CFPB) to resolve allegations that it harmed more than 16 million people with deposit accounts, auto loans, and mortgages. The settlement includes a $1.7 billion penalty, the largest fine ever enforced by CFPB, and more than $2 billion in consumer restitution.
According to CFPB, Wells Fargo illegally assessed fees and interest charges on loans for cars and homes. Some consumers had their vehicles illegally repossessed, while others had overdraft fees unlawfully applied. CFPB officials said the actions of Wells Fargo span over a decade. Wells Fargo incorrectly applied auto-loan payments because of technology and compliance failures from 2011 through 2022, and errors in its home loan modification process went on from 2011 to 2018.
In addition to CFPB's penalty, the Federal Reserve has had a cap on the Wells' asset growth in place for nearly five years. According to the Wall Street Journal, politicians also continue to target the bank, and investors have filed a series of class-action lawsuits.
Most of the $2 billion remediation included in the settlement has been issued to customers. So far, the bank has paid $1.3 billion to 11 million customers who had auto-loan servicing issues. In connection with the settlement, CFPB will terminate one of the consent orders it had placed on the bank in 2016 and clarify that a 2018 consent order will terminate in no more than three years.
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