Wells Fargo has agreed to a $3.7 billion settlement with the Consumer Monetary Safety Bureau over buyer abuses tied to mortgages, auto loans and overdraft charges, the regulator stated Tuesday.
The financial institution was ordered to pay a $1.7 billion civil penalty and “more than $2 billion in redress to consumers,” the CFPB stated in a press release.
“The bank’s illegal conduct led to billions of dollars in financial harm to its customers and, for thousands of customers, the loss of their vehicles and homes,” the company stated in its launch. “Consumers were illegally assessed fees and interest charges on auto and mortgage loans, had their cars wrongly repossessed, and had payments to auto and mortgage loans misapplied by the bank.”
CFPB Director Rohit Chopra stated that Wells Fargo’s “rinse-repeat cycle of violating the law” damage hundreds of thousands of American households and that the settlement was an “important initial step for accountability” for the financial institution.
Shares of the financial institution fell 2.5% in premarket buying and selling.
In October, the financial institution put aside $2 billion for authorized, regulatory and buyer remediation issues, igniting hypothesis {that a} settlement was nearing.
The decision lifts one overhang for the financial institution, which has been led by CEO Charlie Scharf since October 2019. However others stay: Wells Fargo remains to be working below a collection of consent orders tied to its 2016 pretend accounts scandal, together with one from the Fed that caps its asset progress.
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