Wells Fargo in San Francisco entered into a new consent order and agreed to pay more than $3.7 billion to settle a range of claims by the Consumer Financial Protection Bureau.
The $1.9 trillion-asset Wells will pay more than $2 billion in redress to consumers and a $1.7 billion civil penalty to address the CFPB’s concerns with auto lending, mortgages and deposit accounts.
The CFPB had claimed that Wells has illegally repossessed vehicles, charged surprise consumer fees and wrongfully foreclosed on homes. The agency said in a press release that Wells will pay redress to more than 16 million consumer accounts.
Wells said in a separate press release that the CFPB terminated an August 2016 consent order tied to student loan servicing and provided clarity and “a path forward” for removing an April 2018 consent order.
“The CFPB recognized that since 2020, the company has accelerated corrective actions and remediation, including [addressing] the matters covered by today’s settlement,” Wells said in its release. “The required actions related to many of the matters described in the settlement are already substantially complete.”
“As we have said before, we and our regulators have identified a series of unacceptable practices that we have been working systematically to change and provide customer remediation where warranted,” Charlie Scharf, Wells’ CEO, said in the release.
“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,” Scharf said. “Our top priority is to continue to build a risk and control infrastructure that reflects the size and complexity of Wells Fargo and run the company in a more controlled, disciplined way.”
Wells said it expects an operating losses expense of roughly $3.5 billion in the fourth quarter. The loss will include the incremental costs of the CFPB civil penalty and related customer remediation, along with amounts tied to outstanding litigation matters and other customer remediation.