Wells Fargo (NYSE:WFC) shares picked up early Tuesday, on word the financial services giant has agreed to a $3.7-billion settlement with the Consumer Financial Protection Bureau over customer abuses tied to mortgages, auto loans and overdraft fees.
The bank was ordered to pay a $1.7-billion civil penalty and “more than $2 billion in redress to consumers,” the CFPB said in a statement.
“The bank’s illegal conduct led to billions of dollars in financial harm to its customers and, for thousands of customers, the loss of their vehicles and homes,” the agency said in its release. “Consumers were illegally assessed fees and interest charges on auto and mortgage loans, had their cars wrongly repossessed, and had payments to auto and mortgage loans misapplied by the bank.”
CFPB Director Rohit Chopra said that Wells Fargo’s “rinse-repeat cycle of violating the law” hurt millions of American families and that the settlement was an “important initial step for accountability” for the bank.
Wells Fargo was in the news last week after increasing its prime lending rate to 7.5% from 7%.
Wells has approximately $1.9 trillion in assets, serves one in three U.S. households and more than 10% of small businesses in the U.S., and is a leading middle market banking provider in the U.S. “We provide,” says the company website, “a diversified set of banking, investment and mortgage products and services, as well as consumer and commercial finance, through our four reportable operating segments: Consumer Banking and Lending, Commercial Banking, Corporate and Investment Banking, and Wealth & Investment Management.”
WFC began trading Tuesday up 18 cents to $42.00.
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