Wells Fargo in Trouble Again, This Time for Illegal Car Repossessions

John Stumpf, chief executive officer of Wells Fargo & Co., speaks during a House Financial Services Committee hearing in Washington, D.C., on Sept. 29, 2016.
Andrew Harrer/Bloomberg via Getty Images

Just when it looked as if things could not get worse for Wells Fargo, the bank took another beating Thursday when it agreed to pay $24 million for improperly repossessing cars it financed for members of the U.S. military, the Los Angeles Times reports.

A Justice Department investigation revealed that from 2008 until the middle of last year, the bank had repossessed 413 vehicles without the necessary court order, a violation of a federal law that provides financial protections to active-duty military members. As a result, Wells Fargo will pay $4.1 million to settle the Justice Department investigation. In addition, the bank will pay $20 million to the Office of the Comptroller of the Currency for violations dating back to 2006, according to the Times.


If a service member takes out a loan, makes a payment before entering military service and then defaults, the Servicemembers Civil Relief Act requires the bank to have a court order to repossess the vehicle.

The settlement and fine come just as Wells Fargo CEO John Stumpf is in the middle of testifying before a House Financial Services Committee about a scandal involving bank employees fraudulently creating 2 million accounts in the names of unsuspecting customers.

The Justice Department settlement stems from the 2013 repossession of a 2011 Ford Escape from Dennis Singleton, an Army National Guardsman living in Hendersonville, N.C. Singleton was preparing to deploy to Afghanistan when Wells Fargo repossessed the used car without a court order. After selling the car at auction, Wells Fargo attempted to collect more than $10,000 from Singleton, the difference between what was owed on the vehicle and the amount the vehicle sold for at auction.

As part of the settlement, Wells Fargo agreed to pay $10,000 to each affected service member, plus interest and any lost equity in the vehicles. In addition, the bank will pay a $60,000 civil fine.


Read more at the Los Angeles Times.

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