CFPB Charged Wells Fargo Relatively Small Fine to Reach Speedy Resolution
The Consumer Financial Protection Bureau fined Wells Fargo $185 million last year after bank employees created 2.1 million unauthorized credit card and checking accounts. A new report from Reuters shows the bureau could have issued $10 billion in penalties instead.
Why did the CFPB settle for so much less? To speed up the process. Members of the CFPB recommended a lower amount because it was “large enough to be an effective deterrent and would allow the parties to reach a settlement quickly.”
$100 million of the $185 million fine went to the CFPB. This was the largest fine in the Bureau’s history. David Mayorga, a spokesman for the group, said, “We ordered Wells Fargo to pay the largest penalty we have ever imposed and achieved relief for millions of customers.”
In addition to the fines paid to the CFPB, Wells Fargo has reached a settlement for $142 million to cover class action lawsuits for the fake accounts. That settlement will go into effect some time next year after the final hearing on January 4, 2018.
Since the scandal, Wells Fargo has fired over 5,300 employees and has issued $75 million in clawbacks against former executives.