Wells Fargo to pay $3.7 billion over mistreatment of its customers
JUANA SUMMERS, HOST:
Wells Fargo will pay $3.7 billion to settle charges that it illegally mistreated its customers. The nation's top consumer protection regulator says the actions caused some customers to lose their cars or even their homes. It's another very costly penalty for the bank, which has faced scandals in the past. And we're joined now by NPR's Chris Arnold with more. Hey, Chris.
CHRIS ARNOLD, BYLINE: Hey, Juana.
SUMMERS: So, Chris, the Consumer Financial Protection Bureau just announced this enforcement action. Can you just start by walking us through what it says that Wells Fargo was doing?
ARNOLD: Sure. You know, some of this is in the realm of charging customers improper fees and involved 16 million accounts, you know, bank accounts, car loans, other loans. And some of that might have cost somebody hundreds of dollars. It's been going on for a decade or more, a lot of it. But some of this is really more damaging. And the bureau, for example, found that Wells Fargo illegally repossessed people's cars. They didn't record a payment that you made, say, and so your car gets taken away, towed off the street. And that can obviously cause serious problems in people's lives.
SUMMERS: I mean, those are the kind of problems - like, without a car, you can't get to work or take your children to school, for example.
ARNOLD: Right, exactly. And it can be really hard to go quickly buy another car, especially if, you know, you just had your last car repossessed. Also, the bureau says Wells Fargo took actions that resulted in people wrongfully losing their homes through foreclosure. And what happened here is that people might have been having trouble paying their mortgage. Wells Fargo, though, was required to modify the terms of the loan so that they could keep their houses and afford to keep paying. The homeowner qualified for that. But the bank failed to do that, failed to help them. And so people losing houses, losing cars - I mean, this is pretty bad stuff.
SUMMERS: This isn't the first time we've heard about a scandal at Wells Fargo and regulators cracking down. What does the CFPB say about that?
ARNOLD: Well, I asked the director of the bureau, Rohit Chopra, about that. And here's what he had to say.
ROHIT CHOPRA: In many ways, this is deja vu. They have been caught over and over throughout the years cheating their own customers. Wells Fargo serves 1 in 3 households in America. So their rinse/repeat cycle of law violations has a huge impact on our country.
SUMMERS: Chris, that phrase rinse and repeat cycle jumps out at me. So what's the history here?
ARNOLD: Yeah. You all - some of this goes back to 2016, when Wells Fargo got caught opening millions of accounts for customers who did not ask for these accounts and didn't even know they existed. And we did a lot of reporting on that. And what was revealed there was this real pressure cooker culture inside of the bank where low-level workers were told to hit just preposterously high sales targets. And if they didn't, the workers said they'd get berated and threatened with their jobs and sometimes fired. And so some of them broke the rules in order to get people those credit cards and bank accounts that they didn't want. Penalties were issued. The bank said it was going to reform its culture. But these debacles keep happening. This time, it's car loans and mortgages and improper fees.
SUMMERS: Before I let you go, what does Wells Fargo say about all of this?
ARNOLD: Well, after that last scandal, the bank had three different CEOs in three years. The current CEO, Charlie Scharf, said in a statement today basically that this settlement is a milestone in the work to transform the company. It's going to return $2 billion to Wells Fargo customers, pay $1.7 billion in a penalty. And Scharf said, quote, "we remain committed to doing the right thing for our customers."
SUMMERS: NPR's Chris Arnold. Chris, thank you.
ARNOLD: Thanks, Juana. Transcript provided by NPR, Copyright NPR.