On Tuesday, the Consumer Financial Protection Bureau (CFPB) ordered Wells Fargo, a consumer banking giant, to pay a total of $3.7 billion in fines and refunds to customers, marking the largest fine to date against the bank.
The CFPB required Wells Fargo to repay $2 billion to consumers and imposed a $1.7 billion penalty on the bank. The CFPB identified numerous violations of consumer financial laws by Wells Fargo, including illegal fees and interest on auto loans and mortgages, as well as incorrectly applied overdraft fees on savings and checking accounts. These actions affected more than 16 million customers.
This is not the first time Wells Fargo has faced penalties for violating consumer protection laws. In 2016, employees of the bank were found to have opened millions of accounts illegally in an attempt to meet unrealistic sales goals. Since then, Wells Fargo has claimed to be making efforts to improve its practices, but has continued to be fined for additional violations.
As a result, the Federal Reserve has placed an order prohibiting Wells Fargo from expanding until its corporate culture issues are addressed. This order, which was originally implemented in 2018, was initially expected to last only a few years.