Wells Fargo will pay $3.7 billion to settle allegations by the Consumer Financial Protection Bureau that it mismanaged auto loans, mortgages and deposit accounts, in the largest penalty ever levied by the agency, Politico reports. The consent order announced by the CFPB on Tuesday is the latest in a string of woes for the scandal-plagued megabank, which has shelled out billions of dollars in fines and found itself in the crosshairs of Congress after being accused of opening up millions of fake customer accounts and other violations. The CFPB alleged that the San Francisco-based bank illegally repossessed vehicles, charged surprise overdraft fees and froze consumer accounts, in addition to improperly denying mortgage loan modifications.
Wells Fargo agreed to the order without admitting or denying its findings. The bank will pay $2 billion in redress to more than 16 million consumers and a $1.7 billion civil penalty, the largest ever assessed by the CFPB. Of the $2 billion in restitution, $1.3 billion will go to consumers with affected auto lending accounts, $500 million to those with affected deposit accounts and nearly $200 million to those whose mortgage loans were affected. CFPB Director Rohit Chopra said the order should be seen as an “initial step” and that it does not provide immunity for any individuals. He accused Wells Fargo executives of failing to make “rapid enough progress” to clean up the bank .“We see this as an initial step to bring quick relief to families” affected, Chopra said. “It should not be read as a sign that Wells Fargo has moved past its longstanding problems or that the CFPB’s work is done here.”
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