“Wells Fargo’s rinse-repeat cycle of violating the law has harmed millions of American families,” CFPB Director Rohit Chopra said in a statement. “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.”
Along with the monetary penalty, the bank must also stop charging surprise overdraft fees and refund certain auto loan borrowers fees improperly assessed on their debts.
Wells Fargo in a statement said many of the requirements in the settlement “are already substantially complete.”
The consumer bureau said Wells Fargo’s actions had dire consequences for consumers, including repossessed cars, frozen consumer accounts and monumental fees added to mortgage loans. It comes after the CFPB disciplined the bank in previous years for violations regarding student loan servicing, mortgage kickbacks, fake accounts and illegal auto loan practices.
Tuesday’s settlement allowed the bank to terminate a 2016 consent order governing its student loan business.
“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,” Wells Fargo CEO Charlie Scharf said in a statement. “Our top priority is to continue to build a risk and control infrastructure that reflects the size and complexity of Wells Fargo and run the company in a more controlled, disciplined way.”
Wells Fargo’s shares fell slightly in morning trading following the news.
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