The Consumer Financial Protection Bureau has announced that Wells Fargo will pay some $3.7 billion in fines and redress to settle claims that the bank violated banking standards.
According to the CFPB, Wells Fargo cited improper overdraft fees, account freezes, auto repossessions, misapplied home loan payments and even wrongfully foreclosed on homes, affecting millions of consumers since 2011.
“Wells Fargo’s rinse-repeat cycle of violating the law has harmed millions of American families,” said CFPB Director Rohit Chopra. “The CFPB is ordering Wells Fargo to refund billions of dollars to consumers across the country. This is an important initial step for accountability and long-term reform of this repeat offender.”
The bank has been ordered to pay a civil penalty of $1.7 billion and more than $2 billion in redress to consumers.
CFPB specifically notes that, during at least a seven-year period, the bank improperly denied thousands of mortgage loan modifications, which in some cases led to Wells Fargo customers losing their homes to wrongful foreclosures. The bank was aware of the problem for years before it ultimately addressed the issue.
The New York Times notes that Wells Fargo stopped the conduct this year as part of a larger effort to clean up other abusive practices stretching back a decade.