CFPB Could Fine Wells Fargo $1 Billion for Auto Insurance Scandal

CFPB Could Fine Wells Fargo $1 Billion for Auto Insurance Scandal

April 10, 2018         Written By Bill Hardekopf

The Consumer Financial Protection Bureau is preparing for an unprecedented fine against Wells Fargo. The Bureau could charge as much as $1 billion for overcharging auto loan customers for insurance, an act which resulted in 25,000 vehicle repossessions and 250,000 payment defaults.

According to Reuters, “three sources with knowledge of the plans” said Mick Mulvaney, the acting director of the CFPB, is pushing for a fine that exceeds several hundred million dollars. This will be the first fine Mulvaney has issued since his appointment last November, and the first major action for the bureau since Richard Cordray stepped down as director.

Is Mulvaney sending a message that the CFPB, under new leadership, will not tolerate financial negligence against consumers?

When Wells Fargo was fined for their fake accounts scandal, they only paid $185 million in reparations. They could have been charged up to $10 billion in penalties, but the bureau settled for less to expedite the process. This was when Cordray was still in power, representing one of the few remaining decision-makers from the Obama Administration. Trump-appointed Mulvaney has long opposed the way the CFPB operated under Cordray’s leadership.

The Wells Fargo fine may mark the beginning of a noticeable transformation within the Bureau.



The information contained within this article was accurate as of April 10, 2018. For up-to-date information on any of the terms, cards or offers mentioned above, visit the issuer's website. Many of the offers on this article are from our affiliate partners, and LowCards.com may be compensated if you take action with any of our affiliate partners.


bill-hardekopf

About Bill Hardekopf

Bill Hardekopf is the CEO of LowCards.com and covers the credit card industry from all perspectives. Bill has been involved with personal finance for over 15 years. He is a frequent contributor to Forbes, The Street and The Christian Science Monitor.
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