Ever heard the saying f*%k around and find out? Wells Fargo Bank is now in that very painful finding-out stage. The Consumer Financial Protection Bureau just ordered the financial institution to pay $3.7 billion in damages and penalties.
Fun fact, this is the largest fine ever imposed by the Consumer Financial Protection Bureau. The bank will have to pay $2 billion to consumers and a $1.7 billion fine that will go to the CFPB’s Civil Penalty fund, which the bureau says will be used to provide relief to victims of consumer financial law violations.
It’s hard to argue that the famously-mismanaged bank didn’t deserve the hefty penalty.
According to our friends at the CFPB, the company “repeatedly misapplied loan payments, wrongfully foreclosed on homes, illegally repossessed vehicles, incorrectly assessed fees and interest, charging surprise overdraft fees, along with other illegal activity affecting over 16 million consumers.”
What’s worse, this stuff has been going on for years. In 2016, the CFPB fined the bank $100 million for a widespread illegal practice of secretly opening unauthorized accounts.They were separately fined that same year for illegally screwing over student loan borrowers by charging illegal fees, failing to provide payment information, and failing to update inaccurate credit reports.
The bank is also currently being sued for racial discrimination. The April class action lawsuit accuses Wells Fargo, which is the largest bank mortgage lender, of discriminating against Black customers when it comes to mortgage refinancing.
This isn’t even an exhaustive list of all of their alleged misdeeds; it’s just what we could cram into this story. CFPB director Rohit Chopra summarized the situation best in a very scathing statement about the bank.
“Wells Fargo’s rinse-repeat cycle of violating the law has harmed millions of American families,” said Chopra. “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.”
For their part, Wells Fargo’s CEO told the New York Times that they’re taking this all in stride.
“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 Chief Executive Charles W. Scharf said in the statement to the New York Times. Wells Fargo is “a different company today,” he added.
Wells Fargo clearly has a lot to answer for, although it remains to be seen if even a $3.7 billion fine will be enough of a wake-up call.