The US Consumer Financial Protection Bureau (CFBP) on Tuesday imposed the largest civil penalty ever imposed by the regulator on Wells Fargo bank, as part of a $3.7 billion settlement to settle charges for widespread mismanagement of car loans, mortgages and bank accounts.
The CFPB ordered the bank to pay a $1.7 billion civil penalty and another $2 billion was allocated to repair more than 16 million consumer accounts affected by the breaches, the regulator said in a statement.
The bank illegally charged fees and interest on auto and mortgage loans, improperly repossessed vehicles and imposed illegal overdraft fees, among other issues, the regulator said.
“Wells Fargo is a repeat offender that puts a third of American homes at risk of harm,” CFPB Director Rohit Chopra told reporters at a briefing.
He added that regulators should consider whether to place additional constraints on the bank beyond the $1.95 trillion asset limit the Federal Reserve imposed in 2018, which Fed Chairman Jerome Powell says will remain in place until they are addressed. company problems.
Wells Fargo said the settlement will resolve issues that have been pending for several years, saying in a statement that it has “accelerated corrective action and remedies” since 2020.
“This far-reaching agreement is an important milestone in our work to transform operating practices at Wells Fargo and move past these issues,” Charlie Scharf, the bank’s chief executive, said in a statement.
The Wells Fargo fine is the latest in a series of actions underscoring the CFPB’s more aggressive stance under President Joe Biden. Chopra has said the office seeks to hold big business more accountable for misconduct.
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