In September 2016, banking giant Wells Fargo paid $185 million to settle claims that it opened credit card accounts in customers’ names without the customers’ authorization or even their knowledge. That amount pales to a $1 billion settlement Wells Fargo just reached with the Consumer Financial Protection Bureau. As reported in the Wall Street Journal, among other news sources, the CFPB and the Office of the Comptroller of the Currency issued press release today announcing the settlement. Those press releases are here and here.
According to the Washington Post, Wells Fargo had been accused of improper lending practices regarding its auto loan program. These practices included charging customers for auto insurance they did not need, which resulted in many of the customers defaulting on their loans and repossession of their cars. Wells was also charged with charging improper fees to lock in mortgage rates.
While this fine is big enough to get Wells’s and other lenders’ attention, it won’t put Wells Fargo out of business. Wells reportedly has over $1 trillion in assets. Furthermore, though some of this money will be returned to customers who were harmed, it won’t fully compensate them for the damage that was done by forcing many into bankruptcy or otherwise causing them financial hardship.