The CFPB Spanks Wells Fargo With Yet Another Fine Yesterday For Ripping Off Consumers. This Time It’s For $3.75 Billion
The CFPB spanks Wells Fargo with another fine by the CFPB yesterday. The CFPB has ordered Wells Fargo Bank to pay $3.7 billion for violations across several of its largest product lines. This includes mortgage and auto loans that resulted in thousands of customers allegedly losing billions of dollars. Some Wells Fargo customers lost their homes and cars.
Wells Fargo has agreed to pay the fine that includes $2 billion in payments to consumers. They also agreed to pay $1.7 billion in civil penalties to the CFPB’s victims relief fund.
The CFPB accused Wells Fargo of illegally assessing fees and interest charges on mortgage and auto loans. Customers wrongly had consumers’ cars repossessed and had payments misapplied by the bank.
The CFPB said the bank also charged consumers unlawful surprise overdraft fees. In addition, Wells Fargo applied other incorrect charges to customers’ checking and savings accounts.
Wells Fargo officials confirmed in a release Tuesday that it had agreed to a broad-reaching settlement with the CFPB.
Bank officials said current leadership has made significant progress in transforming Wells Fargo.
The CFPB has recognized that since 2020 the company has accelerated corrective actions and remediation.
Wells Fargo also agreed to a path for the company to complete the remainder of the required actions.
The CFPB Spanks Wells Fargo For The Following:
- The CFPB also showed Wells Fargo improperly denied thousands of mortgage loan modifications over the past seven years. This led to Wells Fargo customers losing their homes to wrongful foreclosures. The bank was aware of the problem for years before it addressed the issue.
- Wells Fargo had systematic failures in its servicing of automobile loans. As a result, Wells Fargo exposed consumers to $1.3 billion in harm across more than 11 million accounts. In addition, the bank incorrectly applied borrowers’ payments and improperly charged fees and interest. Wells Fargo also wrongfully repossessed borrowers’ vehicles. The bank also did not refund borrowers for certain fees for products when a loan ended early.
- For years, Wells Fargo unfairly charged surprise overdraft fees. The bank charged these fees even though consumers had enough money in their accounts to cover the transaction. The CFPB and other federal regulators began cautioning financial institutions against this practice for nearly a decade.
- The bank also froze more than 1 million consumer accounts. Wells Fargo says the issue was the result of a faulty automated system that falsely flagged the account for a fraudulent deposit. Customers affected by these account freezes were unable to access any of their money in accounts at the bank for an average of at least two weeks. The bank also made deceptive claims as to the availability of waivers for a monthly service fee.
CFPB officials said Tuesday that Wells Fargo is a repeat offender that has been the subject of multiple enforcement actions by the watchdog agency and other regulators for violations across its lines of business, including faulty student loan servicing, mortgage kickbacks, fake accounts, and harmful auto loan practices.
The $1.7 billion fine will be deposited into the CFPB’s victims relief fund, officials said.
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