The Wells Fargo bank has been ordered to pay a $3.7 billion fine, which is the largest penalty a bank has ever gotten.
Wells Fargo is an American multinational banking and financial advisory company. It was founded in 1929, But currently, the bank is in hot waters after it was found that it has been violating several consumer rights for many years.
On Tuesday, the bank was ordered by federal agencies to pay a fine of $3.7 billion. Out of this $2 billion has to be utilized in customer reimbursements, while the remaining $1.7 billion is a fine for violating customer funds and rights.
Over the years, the bank was engaged in levying high-interest rates on loans and mortgages and illegal fees. It also unlawfully confiscated many cars and homes possessed by its customers. Around 16 million customers of the bank have been affected by these illegal tactics.
According to the Consumer Financial Protection Bureau (CFPB) “The bank’s illegal conduct led to billions of dollars in financial harm to its customers and, for thousands of customers, the loss of their vehicles and homes.”
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Something like this has not happened for the first time with the bank. The company also faced similar charges in 2016, but at that time no concrete action was taken. However, the bank did receive warnings.
But these warnings were not sufficient for them to stop engaging in unlawful behavior and they continued with these practices. In 2018, the bank faced a penalty of $1 billion for mismanaging consumer funds.
At that time the $1 billion fine was also the highest penalty a bank had ever received. But Wells Fargo broke their record again this year by receiving a $3.7 billion penalty.
The company’s CEO Charlie Scharf said in a statement, “We and our regulators have identified a series of unacceptable practices that we have been working systematically to change.”
