Wells Fargo to pay $3.7 billion in CFPB settlement for allegedly harming consumers

• Wells has been under federal scrutiny for years dating back to allegations that the bank opened millions of fake consumer accounts — a scandal that ultimately cost it several billion dollars in penalties.

By the numbers: In the latest settlement, Wells will pay about $2 billion to more than 16 million consumer accounts affected by its alleged actions — plus a $1.7 billion fine to a CFPB fund that provides relief to victims of financial violations.

What CFPB is saying: "The bank’s illegal conduct led to billions of dollars in financial harm to its customers and, for thousands of customers, the loss of their vehicles and homes."

• "Consumers were illegally assessed fees and interest charges on auto and mortgage loans, had their cars wrongly repossessed, and had payments to auto and mortgage loans misapplied by the bank."

What Wells is saying: The settlement resolves multiple matters "that have been outstanding for several years" but that "current leadership has made significant progress to transform Wells Fargo."

The big question: Has Wells Fargo changed its ways?

• Watchdog group American Economic Liberties Project called the bank "one of the worst repeat offenders of consumer financial protection law" and hailed the CFPB action.
• But Wells noted that "CFPB recognized that since 2020, the company has accelerated corrective actions and remediation, including to address the matters covered by today’s settlement."

Editor's note: This article has been updated with additional details throughout.