Wells Fargo to pay government $108M over veteran loans
Wells Fargo announced Friday that it would pay the U.S. government $108 million after settling a lawsuit that claimed it had charged veterans hidden fees to refinance their mortgages.
The claims, made in a lawsuit filed in 2006 by Georgia mortgage brokers Victor Bibby and Brian Donnelly and made public in 2011, said the bank charged veterans hidden fees when refinancing mortgages and hid the fees when veterans applied for federal loan guarantees.
The mortgage brokers received settlements from eight other lenders for similar losses including Bank of America, Citigroup Inc. and JP Morgan Chase & Co.
However, the eight other lenders settled for a combined $161.7 million, making Wells Fargo’s settlement the largest, according to Reuters.
“More than six years ago, when questions about fees on Veterans Administration refinance loans were raised, we resolved those concerns by improving our internal controls and made compensation available to VA customers who closed a refinance before that time,” Tim Sloan, Wells Fargo’s chief executive officer, said in a statement Friday.
“Settling this longstanding lawsuit allows us to put the matter behind us and continue to focus on serving customers and rebuilding trust with our stakeholders. We are committed to serving the financial health and well-being of veterans, and we will continue to honor that commitment now and in the future.”
Wells Fargo has been engulfed by a series of scandals as of late, including reports it charged more than 800,000 customers for unwanted auto insurance.