Consumer Financial Protection Bureau Orders Wells Fargo To Pay $3.7 Billion In Fines

James Lynch Contributor
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Update: This Story has been updated to include a response from a Wells Fargo spokesperson.

The Consumer Financial Protection Bureau (CFPB) ordered Wells Fargo to pay $3.7 billion in fines to redress consumers and pay a penalty for illegal activity.

Wells Fargo will pay more than $2 billion to redress affected consumers with more than $1.3 billion of the money going to auto accounts. Specifically, the bank will pay more than $500 million to affected deposit accounts, including $205 million for illegal overdraft fees and $200 million for affected mortgage services accounts, the CFPB announced Tuesday.

The bank will pay a separate $1.7 billion civil penalty for violations, which will be added to the CFPB’s victims relief fund, the bureau stated. In addition to the fines, Wells Fargo will be required by the CFPB to stop charging surprise overdraft fees and ensure auto borrowers are refunded for add-on fees.

“Wells Fargo’s rinse-repeat cycle of violating the law has harmed millions of American families. 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,” said CFPB Director Rohit Chopra.

Wells Fargo unlawfully repossessed vehicles and bungled borrower accounts, improperly denied mortgage modifications, illegally charged surprise overdraft fees and unlawfully froze consumer accounts and mispresented fee waivers, the CFPB specified in a press release. (RELATED: Fortnite To Pay Gigantic Fine For Allegedly Violating Children’s Privacy, Duping Players)

“As we have said before, we and our regulators have identified a series of unacceptable practices that we have been working systematically to change and provide customer remediation where warranted. 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 company press release.

Wells Fargo detailed in the press release how it has changed its operations since 2019 to enable greater accountability and transparency. Scharf was appointed CEO of Wells Fargo in 2019 following the bank’s unauthorized accounts scandal and other regulatory issues.

A Wells Fargo spokesperson cited the press release in response to a request for comment.