The Consumer Financial Protection Bureau (CFPB) announced a $1 billion settlement with Wells Fargo for selling unnecessary products to consumers, like auto insurance policies and other mortgage-related extensions.
“Today the Bureau of Consumer Financial Protection (Bureau) announced a settlement with Wells Fargo Bank, N.A. in a coordinated action with the Office of the Comptroller of the Currency (OCC),” the CFPB announced Friday. “The Bureau assessed a $1 billion penalty against the bank and credited the $500 million penalty collected by the OCC toward the satisfaction of its fine.”
Wells Fargo has had a rough go of the past two years, facing a seemingly endless stream of large missteps that have led to a slew of negative press coverage.
The bank landed in hot water in September 2016 when it was uncovered that the bank was participating in illegal retail lending practices.
Bank employees issued 565,000 lines of credit and opened 1.5 million bank accounts for customers without their consent from 2011-2014, and sometimes created false email addresses to sign them up for banking services in order to pad their numbers. Some 14,000 of those credit accounts accrued more than $400,000 in fees alone. (RELATED: DOJ Demands Wells Fargo Whistleblower Testify In Formal Investigation)
Initially, Wells was slapped by the Consumer Financial Protections Bureau with a $185 million fine— the largest ever levied by the federal agency at that time — after finding these practices were rampant throughout Wells Fargo since 2011. (RELATED: CFPB Fines Wells Fargo $185 Million For Opening Fake Accounts)
Former Chairman and CEO of Wells Fargo John Stumpf faced congressional investigation, which ultimately led Wells’ board to force the executive to cough up $41 million in assets and earnings he accrued from his decades-long tenure. The move, however, proved not harsh enough for members of Congress and the public. Stumpf announced he was stepping down as chairman and CEO Oct. 12, 2016.
The new CEO of Wells Fargo, Tim Sloan, took over for Stumpf in December, 2016.
CFPB Director Mick Mulvaney said Friday he is happy with the settlement and that it is proof that the agency is enforcing the law under his tenure.
“I am especially pleased that we were able to work closely and effectively with our colleagues at the OCC, and I appreciate the key role they played in the negotiations,” Mulvaney said in a statement. “As to the terms of the settlement: we have said all along that we will enforce the law. That is what we did here.”
Wells Fargo incurred roughly $1.5 billion in fines and penalties–not including the Friday penalty–since September 2016.
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