US Wells Fargo to Pay $1Bln Fine For Hiding Fees in Home Mortgage, Auto Loans

16:32 GMT, 20 April 2018

WASHINGTON (Sputnik) – Wells Fargo Bank has accepted a $1 billion penalty to settle charges that it saddled its customers with unnecessary fees on home mortgages and car loans, the US Bureau of Consumer Financial Protection (CFPB) announced in a press release on Friday.

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"The Bureau found that Wells Fargo violated the Consumer Financial Protection Act (CFPA) in the way it administered a mandatory insurance program related to its auto loans," the release said. "The bureau also found that Wells Fargo violated the CFPA in how it charged certain borrowers for mortgage interest rate-lock extensions."

The settlement requires Wells Fargo to repay affected customers and also pay a $1 billion penalty, the release said.

The case is not directly connected to an earlier scandal in which the bank admitted that employees opened more than 3 million bank and credit-card accounts without customers’ authorization.

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"For more than a year and a half, we have made progress on strengthening operational processes, internal controls, compliance and oversight, and delivering on our promise to review all of our practices and make things right for our customers," Wells Fargo said in a statement explaining the settlement.

The $1 billion fine will be split between the bank’s principal regulator, the Office of the Comptroller of the Currency, and the CFPB, according to the statement.

In the earlier scandal, Wells Fargo came under fire in September 2016 when it acknowledged media reports that employees secretly created accounts on customers’ behalf in order to boost sales numbers. The company paid a $185 million fine to US regulators in connection with the row.