Wells Fargo to Pay $1B Over Rate Lock-Ins
April 23, 2018
The Consumer Financial Protection Bureau and the Office of the Comptroller of the Currency announced a $1 billion settlement with Wells Fargo, which includes penalties against the bank for allegedly delaying some customers’ loan approvals and then charging them a fee for missing a deadline to lock in mortgage rates. Wells Fargo also is being fined in relation to allegations that it forced customers into car insurance they didn’t need.
Affected consumers have already begun receiving settlement checks in the mail. For homeowners who paid Wells Fargo to lock in mortgage rates, the bank will refund the fees as well as interest. Nearly 110,000 homeowners were assessed about $98 million in fees to extend their terms to lock in rates between Sept. 16, 2013, and Feb. 28, 2017, Wells Fargo spokesman Tom Goyda told CNBC. The bank also estimates it will pay about $182 million to affected car loan borrowers, Goyda says.
Wells Fargo CEO Timothy Sloan says the bank is making progress toward “delivering on our promise to review all of our practices and make things right for our customers. Our customers deserve only the best from Wells Fargo, and we are committed to delivering that.”
Source: “What You Need to Know About the Wells Fargo Settlement,” CNBC (April 21, 2018) and “Wells Fargo Fined $1 Billion for Insurance and Mortgage Abuses,” CNNMoney (April 20, 2018)
Updated: October 23, 2018