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'Repeat Offender' Wells Fargo Fined Record $3.7 Billion For Harming Customers It is the largest fine ever imposed by the Consumer Financial Protection Bureau. And the agency said it likely wasn't done yet.

By Gabrielle Bienasz

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Michael M. Santiago / Staff I Getty Images
Wells Fargo in New York City in December 2022.

Wells Fargo, which has been under close regulatory scrutiny since at least 2016 for improper or illegal business practices, has been fined a record $3.7 billion by the Consumer Financial Protection Bureau, per a Tuesday press release.

"Wells Fargo's rinse-repeat cycle of violating the law has harmed millions of American families," said the director of the CFPB, Rohit Chopra, in a statement.

The CFPB was created in the wake of the 2007-2008 financial crisis and is intended to protect customers from improper treatment by financial institutions.

"This is an important initial step for accountability and long-term reform of this repeat offender," Chopra added.

Wells Fargo has paid nearly $20 billion in regulatory fees since 2007 for harming consumers or investors, per The New York Times. In 2016, it paid $185 million over revelations its employees had been opening accounts in various accounts without customer consent, and in 2018 the Federal Reserve Board ordered the bank not to get any bigger than its asset size at the end of 2017 until it "sufficiently improves its governance and controls."

That order from the Federal Reserve Board is still in effect. As part of the agreement, Wells Fargo will have a "path forward" to terminate the order, the company said in a statement. It further said it was "pleased to bring closure to these issues."

"This far-reaching agreement is an important milestone in our work to transform the operating practices at Wells Fargo and to put these issues behind us," said Charlie Scharf, CEO of Wells Fargo, added in the company's release.

The CFPB described Wells Fargo as a "repeat offender," and cited regulatory action it has faced over student loan disbursement and kickbacks for mortgages.

"Put simply: Wells Fargo is a corporate recidivist that puts one out of three Americans at risk for potential harm," Chopra said on a press call Tuesday to announce the fines, which relate to practices going back to at least 2011.

This most recent round of regulatory action has to do with violations and improper business practices. The CFPB said that Wells Fargo charged "unlawful" overdraft fees to customers, applied incorrect fees and interest charges on loans for homes and cars, wrongfully repossessed cars, and "improperly denied thousands of mortgage loan modifications," that in some instances, led to people losing their homes.

The "systematic failures" in auto loans processes alone harmed more than 11 million accounts, the agency said.

The bank also "unlawfully" froze consumer bank accounts for, on average, at least two weeks when it would, often incorrectly, assume a deposit was fraudulent.

As part of the agreement, a total of $2 billion from Wells Fargo will go to harmed customers in various ways, such as a $205 million pot for people who were charged what the agency said were surprise overdraft fees.

As part of this agreement, the bank also "may not charge overdraft fees for deposit accounts when the consumer had available funds at the time of a purchase or other debit transaction, but then subsequently had a negative balance once the transaction settled," the CFPB said.

The other $1.7 billion is a civil penalty that will go to the CFPB's Civil Penalty Fund, "where it will be used to provide relief to victims of consumer financial law violations," the agency wrote.

All in all, the money will be returned to over 16 million customers, the agency said.

And there could be more on the horizon.

This enforcement action "should not be read as a sign that Wells Fargo has moved past its longstanding problems or that the CFPB work here is done," he said on Tuesday's press call, per the New York Times.

Gabrielle Bienasz is a staff writer at Entrepreneur. She previously worked at Insider and Inc. Magazine. 

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