Wells Fargo to pay $24M over military loan violations

Wells Fargo to pay $24M over military loan violations
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Wells Fargo will pay more than $24 million to settle allegations that it broke the law by improperly repossessing cars from military service members, federal regulators said Thursday.

The Office of the Comptroller of the Currency and the Department of Justice said their investigations found violations that took place at the bank for more than seven years, through 2015.

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The DOJ launched an investigation last year after receiving a complaint from the United States Army saying that Wells Fargo repossessed a used car owned by a National Guardsman in North Carolina. According to the complaint, the bank sold the car at public auction.

A lawyer for the National Guardsman requested information from Wells Fargo but never received a response, the DOJ said, sparking the review that uncovered a pattern of violations.

Catherine Pulley, a spokeswoman for Wells Fargo, said the bank has been notifying and compensating service members over the matter and will complete its work in 60 days.

“Wells Fargo is committed to ensuring all service member customers have the important SCRA protections and benefits available to them,” Pulley told The Hill Extra in an emailed statement Thursday. “In those instances where some service members did not receive the appropriate benefits and protections, we did not live up to our commitment and we apologize.”

The bank, which generated $86 billion in revenue last year, will pay $20 million to the Treasury Department, $60,000 to a federal fund, and $10,000 to each affected service member.

The $20 million penalty under the OCC settlement is unusually large for abuses of this particular law, the Service Members Civil Rights Act (SCRA), but the agency cited several factors such as the duration and frequency of violations, as well as the financial harm to service members.

News of the sanctions broke while Wells Fargo chief executive officer John Stumpf was on Capitol Hill for the second time in two weeks to face lawmakers angry over the opening of unauthorized accounts at the bank, a scandal that has rocked the industry this month.

Although unrelated to that scandal, the settlement involving service member loan violations adds to the growing list of woes that Wells Fargo has been dealing with in the aftermath, including multiple lawsuits and a probe into wage practices by the Department of Labor.

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This story was updated on Sept. 30.