Wells Fargo Ordered to Pay $3.7B Over Consumer Loan Violations
On Tuesday, Wells Fargo was hit with $3.7 billion in fines by federal regulators. The allegations date back multiple years ago and affected over 16 million customer accounts, according to CNN.
The Consumer Financial Protection Bureau (CFPB) ordered Wells Fargo to pay the $1.7 billion civil penalty as well as more than $2 billion in compensation to customers for a slew of “illegal activity.”
The “illegal activity” described includes “repeatedly misapplying loan payments, wrongfully foreclosing on homes, illegally repossessing vehicles, incorrectly assessing fees and interest and charging surprise overdraft fees,” per CNN.
Rohit Chopra, the director of CFPB, announced that Wells Fargo is a “repeat offender” and these fines are just an “initial step” in moving past the long-standing problems.
Wells Fargo is accused of “systemic failures” which caused the bank to “wrongfully repossess some borrowers’ vehicles, to improperly charge fees and interest and to fail to refund certain fees, CNN reported. Also included in the report, “regulators say Wells Fargo improperly denied thousands of mortgage loan modifications, causing some customers to lose their homes in “wrongful foreclosures.””
Wells Fargo is also receiving heat for illegal surprise overdraft fees. The CFPB has ordered the bank, moving forward, to make sure auto loan borrowers are granted refunds for certain add-on fees and to also stop issuing surprise overdraft fees to bank account holders.
