CFPB Orders Wells Fargo to Pay $3.7 Billion for Consumer Protection Violations

By John Zasada, JD, CAMS – Shareholder, Financial Institutions Group

On Dec. 20, 2022, the Consumer Financial Protection Bureau (CFPB) ordered Wells Fargo Bank (Wells Fargo) to pay a total of $3.7 billion due to an assortment of federal consumer protection regulation violations. Wells Fargo must pay $2 billion in redress to consumers and a $1.7 billion civil penalty for legal violations. The 32-page consent order sets forth how Wells Fargo violated regulations in three main areas:

1. With respect to auto loan servicing, Wells Fargo incorrectly applied loan payments, erroneously imposed certain fees and charges, incorrectly repossessed customers’ vehicles and failed to refund certain unearned fees on debt cancellation products.
2. With respect to home mortgage servicing, Wells Fargo incorrectly denied mortgage loan modifications to certain qualified borrowers.
3. With respect to consumer deposit accounts, Wells Fargo improperly froze or closed customer accounts, improperly charged certain overdraft fees and did not always waive monthly account service fees consistent with its disclosures.

According to the CFPB, Wells Fargo is a repeat offender that has been the subject of multiple enforcement actions by the CFPB and other regulators for violations across its lines of business, including faulty student loan servicing, mortgage kickbacks, fake accounts and harmful auto loan practices.

For more information on how to avoid consumer protection violations in your regulatory compliance program, contact Doeren Mayhew today.