Wells Fargo agrees to pay $ 385M to settle car loan deal
Wells Fargo has agreed to pay at least $ 385 million to settle a lawsuit in California claiming that thousands of car loan customers have been registered for expensive car insurance without their consent, resulting in many returning the vehicle.
Interested in Wells Fargo?
Add Wells Fargo as an interest to keep up to date with the latest news, videos and analyzes from Wells Fargo from ABC News.
The bank sent the deal Thursday at a federal court in Santa Ana. There is still a need for a judge's approval.
Another defendant, National General Insurance, agreed to pay $ 7.5 million, the New York Post reported.
San Francisco-based Wells Fargo confirmed the deal Friday and called it "an important step in making things right". The bank's statement said that checks will be sent to affected customers.
The procedure in 201[ads1]7 claimed that for more than a decade, Wells Fargo managed insurance for customers' car loans that they did not need because they had private insurance.
Some 25,000 car owners could not meet the additional fees and had their vehicles taken back.
The bank acknowledged in 2017 that $ 80 million in unnecessary insurance fees had been added to 800,000 auto loans.
There is one in a number of scandals involving the bank giant, which began in 2016 to uncover millions of counterfeit accounts, which employees opened to face sales quotas.
As a result, John Stumpf, CEO, was dismissed. Last year, the Federal Reserve lay in the size of Wells Fargo's assets, and Stumpf's compensation, Tim Sloan, declined in March. New injustices had appeared on his watch, including car loans.
Federal regulators who lost patience with Wells Fargo continued their bad behavior, causing harsh penalties. Wells had to pay a $ 1 billion fine last year for the Consumer Financial Protection Bureau and the Office of the Comptroller of the Currency. But more importantly, the Federal Reserve entered and handcuffed Well's ability to grow his business until the bank could prove that it had got its house in order.
Despite the restrictions, Wells Fargo reported in March that it achieved $ 5.86 billion and profits rose 14% from the previous year, aided by higher interest rates.
Wells Fargo stock closed 29 cents Friday at $ 45.63 per share.
