Benzinga - Wells Fargo (NYSE:WFC) & Co. (NYSE: WFC) and authorities struck a $3.7 billion settlement in order for the company to address claims that its conduct affected nearly 16 million customers,
What Happened: A $1.7 billion fine and more than $2 billion in consumer compensation are part of the agreement with the Consumer Financial Protection Bureau (CFBC), the regulatory body announced on Tuesday.
According to the CFBC, the bank improperly charged fees and interest rates on loans for homes and cars.
The agency said that overdraft fees were unfairly imposed on some customers and that some consumers' vehicles were unjustly repossessed.
“Wells Fargo’s rinse-repeat cycle of violating the law has harmed millions of American families,” said Director Rohit Chopra.
Why It Matters: Years have passed while Wells Fargo has worked to handle a number of regulatory issues related to the fake accounts incident, in which it was discovered that it may have established millions of fictitious bank accounts. More issues subsequently spread throughout the bank, particularly in its mortgage and auto lending divisions.
The bank has made it clear for months that it anticipated receiving yet another regulatory fine. It already took a $2 billion penalty in the third quarter.
Consent orders related to the bank's 2016 bogus account scandal are still in effect, including one from the Fed that limits its asset growth.
The bank also stated that further expenditures associated with the CFPC civil penalty, customer remediation activities, and other legal concerns would result in a fourth-quarter operating loss of $3.5 billion, or $2.8 billion after taxes.
A person with knowledge of the situation, according to CNBC, stated the bank still anticipated disclosing results in mid-January with an overall profit.
Price Action: Shares of Wells Fargo are trading 0.47% lower Tuesday to $41.63, according to data from Benzinga Pro.
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Photo: Courtesy Wells Fargo
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