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Wells Fargo has agreed to pay $3.7 billion in fines and damages to settle allegations that it illegally foreclosed on homes, illegally repossessed vehicles and charged unexpected overdraft fees, among other things.
The US Consumer Financial Protection Bureau said Statement On Tuesday, the bank’s actions have “harmed millions of American families” and called the payment “an important first step toward long-term accountability and reform.”
The CFPB said about $2 billion will be spent to compensate the more than 16 million affected consumer accounts, adding that another $1.7 billion in fines are expected for the agency. Civil Penalty Fund and to provide relief to victims of consumer financial law violations.
In its statement, the CFPB said it found that Wells Fargo:
- In the servicing of car loans, there was a systematic defect and the vehicles of the borrowers were illegally seized.
- “False denials of thousands of mortgage loan modifications,” in some cases resulted in customers losing their homes.
- Illegal overdraft fees for ATM withdrawals and debit card transactions.
- It illegally froze consumer bank accounts, and these customers were unable to access their money for an average of at least two weeks.
Wells Fargo did not immediately respond to a request for comment after regular business hours Tuesday, but did respond at the time Statement The bank’s CEO, Charlie Scharf, said on its website that the bank was working with regulators to systematically correct “unacceptable practices” at the firm and to remediate customers “as appropriate.”
Scharf called the settlement “an important milestone in our work to change the way we operate at Wells Fargo and put these issues behind us,” and said, “We’ve made significant progress over the past three years, and we’re a different company today.”
The bank has been dealing with problems for years and has been involved with regulators. In 2016, A Fake account scandal It made headlines and the bank has since lost two CEOs.
Rohit Chopra, director of the CFPB. said Tuesday that “over the past several years, Wells Fargo executives have taken steps to address long-standing problems” but that the $3.7 billion payment “should not be taken as a sign that Wells Fargo has moved past its long-standing problems or that the CFPB’s work is here.” done.”
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