Two federal regulators on Friday announced [press release] a $1 billion settlement with Wells Fargo [official site] after finding [text, PDF] that the the bank violated the Consumer Financial Protection Act.
The Consumer Financial Protection Bureau (CFPB) and the Office of Comptroller of the Currency (OCC) [official websites] found that Wells Fargo unfairly failed to follow the mortgage-interest-rate-lock process it explained to some prospective buyers and unfairly administered a mandatory insurance program related to its auto loans.
The report states that from 2011 to 2016, “[Wells Fargo] caused hundreds of thousands of consumers to be charged substantial premiums—typically just over $1,000 a policy—for unnecessary or duplicative Force-Placed Insurance.”
The bank acknowledges that for at least 27,000 customers, “the additional cost of the Force-Placed Insurance could have contributed to a default that resulted in the repossession of their vehicle.”
The CFPB assessed a $1 billion penalty against Wells Fargo and stated, “under the terms of the consent orders, Wells Fargo will remediate harmed consumers and undertake certain activities related to its risk management and compliance management.”
CFPB director Mike Mulvaney said, “I am especially pleased that we were able to work closely and effectively with our colleagues at the OCC, and I appreciate the key role they played in the negotiations.”
“As to the terms of the settlement: we have said all along that we will enforce the law. That is what we did here.”