Wells Fargo slapped with $1B fine for lending abuses

Wells Fargo will pay a $1 billion fine for unfair lending practices, the Consumer Financial Protection Bureau (CFPB) announced on Friday.

The consumer watchdog agency and the Office of the Comptroller of the Currency (OCC) said the fine is part of a settlement reached after the bank forced an auto loan insurance program onto hundreds of thousands of consumers that did not need it and mischarged consumers for certain mortgage interest rate lock extension products. In the latter case, borrowers were overcharged for missing a deadline to lock in interest rates on their home mortgages, while the delays were actually the bank’s fault.

Of those who were forcibly sold the auto loan insurance product, thousands had their cars repossessed because they could not afford the extra payments, the bank admitted.

Wells Fargo said the hefty fine, one of the largest levied on any bank unrelated to the financial crisis, will cut about $800 million off of its first-quarter profit.

The CFPB and the OCC said Wells Fargo will remediate consumers harmed by the policies.

The scandal-ridden bank agreed to pay a $185 million fine in 2016 after it was revealed that employees were creating fraudulent accounts for customers without their approval.

Despite the news, shares of Wells Fargo opened Friday’s trading session more than 2% higher.