Megabank Wells Fargo has been ordered to pay $3.7 billion in a settlement with the Consumer Financial Protection Bureau. Per NBC News, the action includes $1.7 billion in civil penalties; the rest is restitution for millions of consumers who have been ripped off in various ways since 2011. In its own news release, the agency said Wells "repeatedly misapplied loan payments, wrongfully foreclosed on homes and illegally repossessed vehicles, incorrectly assessed fees and interest, charged surprise overdraft fees, along with other illegal activity." In a statement, newly seated CEO Charles Scharf praised his executive team’s "significant progress in transforming Wells Fargo" and called the agreement an "important milestone in our work to transform the operating practices."
It will be a while before regulators consider Wells to be sufficiently transformed. Per Politico, CFPB Director Rohit Chopra called the bank "one of the most problematic repeat offenders" and told reporters, "We see this as an initial step to bring quick relief to families … It should not be read as a sign that Wells Fargo has moved past its longstanding problems or that the CFPB’s work is done here.” Chopra remained unimpressed as of Tuesday morning, tweeting, "Efforts by Wells Fargo executives to clean up the bank have been far too slow."
According to the New York Times, it’s the largest fine in the agency’s 11-year history, shattering the previous record of $1 billion set in 2018, also by Wells Fargo. As the Times notes, Wells “must still contend with other regulatory challenges,” including restrictions imposed by both the Federal Reserve and the Office of the Comptroller of the Currency. In its news release, the CFPB thanked "members of the public" whose complaints "aided in the detection of some of the illegal activity uncovered in the CFPB’s investigation." Consumers wishing to file complaints against any financial institution are encouraged to visit the CFPB website or ring 855.411.CFPB (2372).
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