US CFPB orders Wells Fargo to pay US$3.7b for mismanagement

WELLS Fargo has agreed to pay US$3.7 billion to settle charges from a US consumer watchdog over widespread mismanagement of automobile loans, mortgages and deposit accounts.

The Consumer Financial Protection Bureau (CFPB) has ordered Wells Fargo Bank to pay a US$1.7 billion civil penalty and another US$2 billion to redress more than 16 million consumer accounts affected by the numerous violations, it said in a statement.

The bank illegally assessed fees and interest charges on auto and mortgage loans, had cars “wrongly repossessed” and charged unlawful surprise overdraft fees, among other issues, CFPB said.

Wells Fargo said in a statement that the “broad-reaching settlement” will resolve issues that have been outstanding for several years, and noted it has “accelerated corrective actions and remediation” since 2020.

The steep fine for Wells Fargo is the latest in a series of actions that underscore the CFPB’s more aggressive posture under President Joe Biden’s administration. Director Rohit Chopra has said the bureau is looking to hold big companies more accountable for repeated misconduct. REUTERS