The case of the CFPB against Wells Fargo before the Feds took the book off of well-funded banking giants, and Janet Yellen
The bureau said that Wells Fargo had been guilty of “illegal activity” including misapplying loan payments, foreclosing on homes, illegally repossessing vehicles, andcharging surprise overdraft fees.
The people had their cars taken from them and the bank took actions that resulted in them losing their homes, according to the order from the CFPB. Customers were charged improper fees for over-the-counter transactions.
Under the order the CFPB says Wells Fargo is required to reach out to customers who were harmed and eligible for reimbursement. Customers of Wells Fargo or any other financial providers can complain to the bureau by visiting their website.
A CFPB official speaking on background said customers who lost their cars after they were wrongfully repossessed will receive a base amount of $4,000 each, and could receive more money depending on the particulars of their case.
“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,” said Scharf. “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.”
Over the past decade the bank has endured a series of high profile and embarrassing debacles, including the revelations NPR reported on in 2016 that the banks hyper-aggressive internal sales pressure had resulted in bank employees opening millions of checking, debit, and credit card accounts for customers without their knowledge, in order for the employees to meet their sales goals.
For instance, Chopra noted that the settlement does not provide immunity for individuals at Wells Fargo, and the agency recognizes the $3.7 billion in fines and restitution will not fix the bank’s problems.
In her final act as chair of the Federal Reserve, Janet Yellen in February 2018 threw the book at Wells Fargo by imposing unprecedented penalties on the bank that remain in place today.
A Remark on Fees Induced by an Uncertain Customer for a Charged Subsidy on a Physical Property of a Distributed Company
The agency said these fees are imposed when customers have available funds at the time of purchase but then subsequently had a negative balance once the transaction settled.