The Consumer Financial Protection Bureau (CFPB) has ordered Wells Fargo to pay $3.7 billion in compensation for illegal conduct leading to billions of dollars in financial harm to its customers.
The third-largest U.S bank by domestic assets will pay more than $2 billion in redress to consumers and a $1.7 billion civil penalty for legal violations across several of its largest product lines that include unlawfully repossessing vehicles and bungling borrower accounts, improperly denying mortgage modifications, illegally charging surprise overdraft fees, and unlawfully freezing consumer accounts while mispresenting fee waivers, according to the CFPB statement.
Facade of a Wells Fargo bank branch in Manhattan (Wells Fargo via Associated Press / AP Images)
In thousands of cases, the nation's largest depository mortgage lender caused customers to lose their vehicles and homes.
CFPB Director Rohit Chopra said in a release that "Wells Fargo’s rinse-repeat cycle of violating the law has harmed millions of American families."
"The CFPB is ordering Wells Fargo to refund billions of dollars to consumers across the country," he continued. "This is an important initial step for accountability and long-term reform of this repeat offender."
"We have made significant progress over the last three years and are a different company today," said CEO Charlie Scharf in a press release. "We remain committed to doing the right thing for our customers and working closely with our regulators and others to deal appropriately with any issue that arises."
"This far-reaching agreement is an important milestone in our work to transform the operating practices at Wells Fargo and to put these issues behind us," he added.
As outlined by the CFPB, Wells Fargo has been ordered to stop charging surprise overdraft fees and ensure auto loan borrowers receive refunds for certain add-on fees.
Wells Fargo & Co
.Ticker Security Last Change Change % WFC WELLS FARGO & CO. 41.82 +0.63 +1.53%