Wells Fargo to Pay Record $1.7 Billion CFPB Fine to Settle Allegations it Harmed Over 16 Million People with Deposit Accounts, Auto Loans and Mortgages

From [HERE] Wells Fargo WFC 0.74%increase; green up pointing triangle & Co. reached a $3.7 billion deal with regulators to resolve allegations that it harmed more than 16 million people with deposit accounts, auto loans and mortgages.

The settlement with the Consumer Financial Protection Bureau includes a $1.7 billion penalty, the agency’s largest-ever fine, and more than $2 billion in consumer restitution, the regulator said Tuesday.

The consumer watchdog agency said the bank illegally assessed fees and interest charges on loans for cars and homes. Some consumers had their vehicles illegally repossessed while others had overdraft fees unlawfully applied, the agency said.

Wells Fargo’s regulatory troubles continue to ripple through the bank more than six years after its fake account scandal burst into public view. At the time, regulators alleged that Wells Fargo executives focused so heavily on meeting lofty sales goals that they pressured low-level employees to open unauthorized accounts. Other problems later surfaced across the San Francisco-based bank, including in its lending and deposit-taking businesses.

The CFPB settlement resolves a major penalty hanging over Wells Fargo but leaves it handcuffed by other regulators. The Federal Reserve has had a cap on the bank’s asset growth in place for nearly five years. Politicians continue to target the bank, and investors have filed a series of class-action lawsuits.

“Wells Fargo is a corporate recidivist,” said CFPB Director Rohit Chopra, on a call with reporters Tuesday. He said the settlement “should not be read as a sign that Wells Fargo has moved past its longstanding problems.”

The bank had been negotiating with the CFPB for months in an effort to lump as many outstanding issues into the settlement as possible, according to people familiar with the matter. [MORE]