Wells Fargo to pay $575 million in 50-state settlement over sales practices

Wells Fargo will pay $575 million in a settlement with all 50 states and the District of Columbia after the bank is accused of charging millions of customers for unwanted accounts and financial products.

Iowa Attorney General Tom Miller announced Friday that Wells Fargo had agreed to the massive settlement after a probe led with his counterparts in Arizona, Connecticut and Pennsylvania.

{mosads}The agreement is the latest in a long line of federal and state penalties for Wells Fargo, which opened and charged customer fees on up to 3.5 million unauthorized banking and credit card accounts.

Wells Fargo is also accused of enrolling customers in unnecessary auto insurance policies and failing to issue mortgage interest-rate adjustments to eligible customers. Hundreds of customers unable to pay those higher costs lost homes and automobiles to foreclosure.

“We are pleased to come to this agreement with the state Attorneys General,” the bank said in a statement. “It resolves a number of previously disclosed inquiries and underscores our serious commitment to making things right in regard to past issues as we work to build a better bank.”

Wells Fargo has faced severe fines and sanctions from federal regulators over the sprawling sales scandal. Under chairman and CEO Timothy Sloan, the bank has struggled to regain trust from Washington and will likely face a congressional probe led by Rep. Maxine Waters (D-Calif.).

The bank paid $185 million to the Consumer Financial Protection Bureau (CFPB) in 2016 in a consent order over unauthorized bank accounts, and another $1 billion in April in a joint settlement with a bank regulator over the auto and mortgage policies.

Wells Fargo also paid $480 million to settle securities fraud allegations from stockholders who accused the bank of failing to disclose federal and state scrutiny of its sales practices

The Federal Reserve in February placed a growth cap on Wells Fargo until the San Francisco mega-bank submits an adequate plan to prevent future scandals. Wells Fargo cannot exceed $1.95 trillion in assets until the Fed Board of Governors approves changes to compliance and sales safeguards.

Fed Chairman Jerome Powell told Sen. Elizabeth Warren (D-Mass.) in an October letter that Wells Fargo had yet to meet the central bank’s standards for lifting the growth cap, according to Reuters.

Tags Elizabeth Warren Maxine Waters

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