Wells accepted the order without admitting or denying his findings. The bank will pay $2 billion in damages to more than 16 million consumers and a civil fine of $1.7 billion, the largest ever imposed by the CFPB. Of the $2 billion in restitution, $1.3 billion will go to consumers whose auto loan accounts are affected, $500 million to those whose deposit accounts are affected, and nearly $200 million to those whose mortgage loans were affected.
CFPB Director Rohit Chopra said the order should be seen as a “first step” and did not grant immunity to any individual. He accused Wells executives of not making “progress fast enough” to clean up the bank.
“We see this as a first step in bringing quick relief to families” affected, Chopra said in a call with reporters. “This should not be taken as a sign that Wells Fargo is past its long-standing issues or that the CFPB’s work here is done.”
Wells is “one of the most problematic repeat offenders” the CFPB has encountered in its 11 years of existence, he said.
Charlie Scharf, CEO of Wells Fargo, said in a statement that “the far-reaching agreement is an important step in our work to transform Wells Fargo’s operating practices and to put these issues behind us.”
“We and our regulators have identified a series of unacceptable practices which we have worked systematically to change and provide corrective action to customers where warranted,” he said.
Sen. Elizabeth Warren (D-Mass.) urged federal regulators to break up the bank following the CFPB order.
“Wells Fargo has repeatedly broken the law and ripped off its customers,” Warren tweeted. “I’ve said it once, and I’ll say it again: We need to break up Wells Fargo.”
Consumer advocates echoed his call.
Better Markets President and CEO Dennis Kelleher said it was “disappointing” that the CFPB did not discipline individuals at the firm.
“Banks won’t stop breaking the law until bankers are personally and severely punished,” Kelleher said in a statement. “Equally important, given the egregious and repeated nature of the violations committed by one of the largest banks in the country, it is high time for financial regulators to determine whether Wells Fargo should be broken up.”