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Wells Fargo fined $1 billion for car, home loan abuses

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Staff Writer | April 21, 2018
Wells Fargo
Banking   According to the settlement

Wells Fargo agreed to pay $1 billion to settle federal claims of misconduct in its auto-lending and mortgage businesses.

According to the settlement with the Consumer Financial Protection Bureau (CFPB) and Office of the Comptroller of the Currency (OCC), Wells Fargo will pay each regulator 500 million dollars.

"The Bureau found that Wells Fargo violated the Consumer Financial Protection Act (CFPA) in the way it administered a mandatory insurance program related to its auto loans. The Bureau also found that Wells Fargo violated the CFPA in how it charged certain borrowers for mortgage interest rate-lock extensions," the CFPB said in a statement.

Under the terms of the settlement, Wells Fargo will also remediate the consumers affected and undertake certain activities related to its risk management and compliance management.

"The OCC took these actions given the severity of the deficiencies and violations of law, the financial harm to consumers, and the bank's failure to correct the deficiencies and violations in a timely manner," the OCC said.

This is not the first time that Wells Fargo has mistreated its customers. The bank admitted in 2016 that its employees opened more than two million fake accounts to meet sales quotas without customers' authorization.

In September 2016, the bank agreed to pay 185 million dollars in fines to regulators to settle a class-action suit.

The U.S. Federal Reserve said in February that it would restrict the growth of Wells Fargo due to its widespread consumer abuses and other compliance breakdowns until it sufficiently improved its governance and controls.

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