Feb 21, 2020 - Economy

Wells Fargo agrees to pay $3 billion to settle consumer abuse charges

Orion Rummler

In this image, two people stand in front of a Wells Fargo ATM — Clients use an ATM at a Wells Fargo Bank in Los Angeles, Calif. Photo: Ronen Tivony/SOPA Images/LightRocket via Getty Images

Wells Fargo agreed to a pay a combined $3 billion to the Justice Department and the Securities and Exchange Commission on Friday for opening millions of fake customer accounts between 2002 and 2016, the SEC said in a press release.

The big picture: The fine "is among the largest corporate penalties reached during the Trump administration," the Washington Post reports.

Details: $500 million will go to the SEC. Under this settlement, Wells Fargo acknowledges that it "forged signatures and misused customers’ personal information in order to meet unrealistic sales goals," the Post reports.

Flashback: The bank was charged $575 million in 2018 for the fake-account scandal — and after it paid $2.1 billion in 2018 for its role in selling subprime mortgages prior to the financial crisis. The fine announced on Friday is in addition to these penalties.

What they're saying:

“Wells Fargo repeatedly misled investors, including through a misleading performance metric, about what it claimed to be the cornerstone of its Community Bank business model and its ability to grow revenue and earnings.”

— Stephanie Avakian, co-director of the SEC’s Division of Enforcement, in a statement on Friday

"Over the past three years, we’ve made fundamental changes to our business model, compensation programs, leadership and governance. While today’s announcement is a significant step in bringing this chapter to a close, there’s still more work we must do to rebuild the trust we lost. We are committing all necessary resources to ensure that nothing like this happens again, while also driving Wells Fargo forward."

— Wells Fargo CEO Charlie Scharf in a Friday statement

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Wells Fargo agrees to pay $3 billion to settle consumer abuse charges

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