Citing “widespread mismanagement of auto loans, mortgages, and deposit accounts,” the federal consumer financial protection agency ordered $3.7 billion to be paid in fines and redress by one of the nation’s largest banks, the agency said Tuesday.
In a release, the Consumer Financial Protection Bureau (CFPB) said it issued the order to Wells Fargo Bank to pay more than $2 billion in redress to consumers and a $1.7 billion civil money penalty (CMP) for legal violations across several of its largest product lines.
“The bank’s illegal conduct led to billions of dollars in financial harm to its customers and, for thousands of customers, the loss of their vehicles and homes,” the bureau said in a release. “Consumers were illegally assessed fees and interest charges on auto and mortgage loans, had their cars wrongly repossessed, and had payments to auto and mortgage loans misapplied by the bank.”
The bureaus said the bank’s actions “harmed millions of consumers over a period of several years, with violations across many of the bank’s largest product lines.”
The agency also charged that the bank charged consumers unlawful surprise overdraft fees and applied “other incorrect charges” to checking and savings accounts.
The CFPB said that under the terms of the order, Wells Fargo will pay redress to the more than 16 million affected consumer accounts and pay a $1.7 billion CMP, which will go to the CFPB’s Civil Penalty Fund, to be used to provide relief to victims of consumer financial law violations.
The agency also made a point of stating that the bank is a “repeat offender” and has been the subject of multiple enforcement actions by the CFPB and other regulators “for violations across its lines of business, including faulty student loan servicing, mortgage kickbacks, fake accounts, and harmful auto loan practices.”