On Tuesday, the Consumer Financial Protection Bureau (CFPB) announced that perennial example of corporate greed and corruption Wells Fargo has been ordered to pay out $1.7 billion in fines and another $2 billion in “redress to consumers.” This is after more than a decade of defrauding consumers by charging them illegal fees, interest rates, and wrongly repossessing things like cars.
The settlement includes Wells Fargo repaying customers by “returning improperly charged fees and offering some financial relief to those whose finances and credit ratings were hurt by the bank’s practices.” Charles Scharf, Wells Fargo’s current chief executive, said this is all great and it’s time to “put these issues behind us.” Considering that just this past year the banking giant found itself under the magnifying glass again after reports came out claiming Wells Fargo had a very recent history of discriminatory lending and hiring, how far “behind” them this really is remains to be seen. Fool me once and all of that.
The fine is considerably larger than what experts had believed Wells Fargo was facing, though the fact that the bank would be paying out one of the largest fines in CFPB history was almost assured. This is just the latest fine and settlement for the bank that has spent the last decade being accused of and proven to have participated in the kinds of corporate, consumer, and labor villainy usually reserved for Frank Capra movies.
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According to the CFPB, here’s a list of what Wells Fargo did (or didn’t do as the case may be):
- Unlawfully repossessed vehicles and bungled borrower accounts: Wells Fargo had systematic failures in its servicing of automobile loans that resulted in $1.3 billion in harm across more than 11 million accounts. The bank incorrectly applied borrowers’ payments, improperly charged fees and interest, and wrongfully repossessed borrowers’ vehicles. In addition, the bank failed to ensure that borrowers received a refund for certain fees on add-on products when a loan ended early.
- Improperly denied mortgage modifications: During at least a seven-year period, the bank improperly denied thousands of mortgage loan modifications, which in some cases led to Wells Fargo customers losing their homes to wrongful foreclosures. The bank was aware of the problem for years before it ultimately addressed the issue.
- Illegally charged surprise overdraft fees: For years, Wells Fargo unfairly charged surprise overdraft fees - fees charged even though consumers had enough money in their account to cover the transaction at the time the bank authorized it - on debit card transactions and ATM withdrawals. As early as 2015, the CFPB, as well as other federal regulators, including the Federal Reserve, began cautioning financial institutions against this practice, known as authorized positive fees.
- Unlawfully froze consumer accounts and mispresented fee waivers: The bank froze more than 1 million consumer accounts based on a faulty automated filter’s determination that there may have been a fraudulent deposit, even when it could have taken other actions that would have not harmed customers. Customers affected by these account freezes were unable to access any of their money in accounts at the bank for an average of at least two weeks. The bank also made deceptive claims as to the availability of waivers for a monthly service fee.
So far, while some Wells Fargo executives finally lost their jobs (or conveniently stepped away) after having to admit firing upwards of 3,500 employees who were clearly participating in a culture of greed and fraud created in the C-suites, they have walked away with just under hundreds of millions in golden parachute packages. And the evidence against Wells Fargo was numerous and included defrauding everyone all the time to make big profits.
They have had to pay out billions in settlements, but the veracity of those settlements is questionable. After the Trump administration touted a $1 billion settlement with the bank in 2018, it slowly trickled out that the language in the settlement—created by famed multitasking douche bag Mick Mulvaney—was uniquely corrupt. It created a payout system that would force the victims of Wells Fargo’s fraud, people who had lost thousands of dollars in bogus loans and insurance deals, to come up with the money to investigate the billion-dollar behemoth if they wanted to attempt any possible recourse for the money they had lost.
And that’s just the $1 billion they agreed to in 2018. There was the $1.2 billion they agreed to after admitting they scammed the U.S. government into insuring piles of poo the bank had “certified” were solid home loans back between 2001-2008. Maybe you heard of that? There are a few movies about it.
In recent months, news of the bank’s continuing crapitude continued to make headlines. In May, a former Wells Fargo executive accused the billion-dollar bank of firing him for pointing out that pretending to hold job interviews for fake jobs in order to pretend you have diverse hiring practices wasn’t a good thing to be doing. That accusation happened in May. Of 2022.
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From fake customer accounts to fake job interviews, Wells Fargo is just the worst