Wells Fargo has begun its consumer redress review program for customers who were victims of the bank’s fraudulent sales practices and have not been made whole though other remediation programs.
The program was created after a $575 million settlement was reached between Wells Fargo and 50 state attorneys general plus the District of Columbia in late December to resolve claims about bank violations of state consumer protection laws.
The violations, which occurred between 2002 and 2017, included setting up unauthorized bank accounts, renters and insurance policies and auto loan collateral protection insurance policies. In addition, there were incorrect bank fees charged to lock in mortgage rates and failure to refund unearned premiums on certain auto finance guarantee asset protection products.
The amounts states and Washington, D.C., received varied based on the number of people impacted, and ranged from a low of $1.1 million for Washington, DC to $148.7 million for California.
State attorneys general have been announcing the start of the program this week, directing consumers to the Wells Fargo redress site for information about eligibility for redress and bank phone numbers to reach specific bank teams addressing different violations.
The Wells Fargo site notes that in most cases eligible customers should receive remediation without having to do anything but can contact designated teams with questions.
The redress program is the latest in a series of settlements the bank has reached with regulators, beginning with a $185 million fine levied by the Consumer Financial Protection Bureau in September 2016 and including an agreement to pay a $1 billion settlement to the Office of the Comptroller of the Currency and the CFPB last April.
Meanwhile, the Federal Reserve continues to limit the size of the bank with a cap on assets that was imposed last February. In a letter he sent to Congress in November, Fed Chairman Jerome Powell said the cap won’t be lifted until the bank addresses deficiencies in board oversight and its risk management program.
More recently, Sen. Elizabeth Warren, D-Mass. wrote the Fed chairman urging him against lifting the growth cap until Tim Sloan is removed as CEO. Her letter cites a report in Capitol Forum that starting in 2016 employees in the bank’s wholesale banking division had “routinely falsified clients’ signatures and otherwise doctored paperwork” in order to comply with a settlement reached with the OCC concerning violations of anti-money laundering laws.
Sloan led the division during the time the violations took place and, according to Capitol Forum, was also in charge when the documents were allegedly falsified. Warren first called for Sloan’s firing in October because he held senior positions during the time that the earlier violations, including those which were the subject of the redress program occurred.
In September 2016, Warren called for then-CEO and Chairman John Stumpf to resign because of the fake accounts scandal and he did so the following month.
— Related on ThinkAdvisor: