Wells Fargo is paying $575 million to states to settle fake account claims
Over the past two years, Wells Fargo has faced numerous lawsuits and government investigations stemming from a cascade of business scandals.
On Friday, it took a step to put one batch of accusations behind it.
The bank agreed to pay $575 million to all 50 states and the District of Columbia to settle civil charges related to the bank’s fake-accounts scandals.
The agreement, which applies to charges brought by states’ attorneys general, follows other fines and settlements Wells Fargo (WFC) has paid out since September 2016. That’s when the bank admitted its employees opened as many as 3.5 million fake bank and credit card accounts without customers’ knowledge. Since the first revelation, a series of internal and external probes have uncovered a wider culture of problems at the bank.
In April, two federal regulators fined the bank $1 billion for forcing customers into car insurance and charging mortgage borrowers unfair fees.
In May, Wells Fargo agreed to pay $480 million to settle a class-action securities fraud lawsuit brought by investors who alleged the bank made misstatements and omissions in its disclosures about sales practices.
And in October, Wells Fargo agreed to pay a $65 million penalty to New York state related to the fake-accounts scandals.
As part of the latest agreement with the states, Well Fargo said it will also designate teams to review customer inquiries and create a website that describes the bank’s remediation efforts.
“This agreement underscores our serious commitment to making things right in regard to past issues as we work to build a better bank,” Wells Fargo CEO Tim Sloan said in a press release.
The bank is still under restrictions imposed by the Federal Reserve in February. Wells Fargo won’t be allowed to grow any bigger than it was at the end of last year — about $2 trillion in assets — until the Fed is satisfied that it has cleaned up its act.