On December 20, 2022, the CFPB ordered Wells Fargo Bank to pay more than $2 billion in redress to consumers and a $1.7 billion civil penalty for legal violations across several of its largest product lines. According to the CFPB’s release, Wells Fargo engaged in illegal activities that led to billions of dollars in financial harm to its customers and, for thousands of customers, the loss of their vehicles and homes.
From CFPB Director Rohit Chopra’s statement:
“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.”
Wells Fargo is one of the country’s largest banks and offers a variety of consumer financial services, including mortgages, auto loans, savings and checking accounts, and online banking services. In the consent order, the CFPB alleges that Wells Fargo:
Incorrectly applied borrowers’ payments, improperly charged fees and interest, and unlawfully repossessed borrowers’ vehicles;
Improperly denied thousands of mortgage loan modifications which led to some customers losing their homes to wrongful foreclosures;
Illegally charged surprise overdraft fees; and
Unlawfully froze consumer accounts and mispresented fee waivers.
Through the enforcement action, the CFPB ordered Wells Fargo to:
Provide more than $2 billion in redress to consumers;
Stop charging surprise overdraft fees;
Ensure auto loan borrowers receive refunds for certain add-on fees; and
Pay $1.7 billion in penalties.
Read the CFPB’s press release here.
The consent order can be found here.