By Ken Sweet -
The Associated Press
The banking giant Wells Fargo must pay 3.7 billion dollars for the accusations against it for the alleged collection of illegal fees and interest on mortgages and loans to buy vehicles, as well as overdraft fees incorrectly applied to checking and savings accounts.
The Consumer Financial Protection Bureau (CFPB) ordered the bank on Tuesday to refund $2 billion to customers and also imposed a fine of $1.7 billion.
It is the highest sanction that the CFPB has applied to a bank and the highest also against Wells Fargo
, which for years has been trying to clean up its image after a series of scandals.
The CFPB concluded that the bank's misconduct has harmed more than 16 million customers.
In addition to charging undue fees and interest on loans to buy cars, he came to irregularly take them away for non-payment;
in addition, it refused to accept modifications to the mortgages of thousands of homeowners.
Wells Fargo will have to pay a million-dollar fine for the creation of false accounts
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“Wells Fargo's repeated cycle of legal violations has harmed millions of families,” Rohit Chopra, director of the CFPB, said in a statement.
Since 2016, authorities have repeatedly sanctioned Wells Fargo for violations of consumer protection law.
For example ,
employees were found to be illegally opening millions of accounts to meet set sales targets
.
[Wells Fargo Agrees to Pay $3 Billion to Settle Fake Account Opening Scandal]
Since then, managers have said the bank is working to right its wrongs, but other violations have been uncovered, such as those related to home loans and auto loans.
“Wells Fargo is a repeat offender that
potentially puts one in three Americans at risk
,” Chopra said.
The bank's pattern of behavior has led regulators to take additional action against it that goes beyond fines and penalties, Chopra said.
Wells Fargo sign in front of a branch in Florida, February 22, 2022. Gene J. Puskar / AP
In 2018, Wells Fargo paid $1 billion in penalties for serious consumer law violations, the largest ever against a bank for such violations.
The bank warned its investors that it expected additional fines and penalties from regulators and therefore set aside $2 billion in the third quarter.
Wells Fargo remains under an order from the Federal Reserve that vetoes it from growing until its legal problems are resolved;
it was enacted in 2018 and was initially believed to last one or two years.
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Bank director Charles Scharf said Tuesday that the settlement with the CFPB is part of an effort to "transform operating practices at Wells Fargo and move past these issues."
While the bank tried to frame the settlement as a resolution to its wrongdoing, CFPB officials said
some of the violations cited in the order took place this year
.
“This should not be seen as Wells Fargo having put its problems behind it,” Chopra warned.