Another billion-dollar fine was paid by one of the largest American banks for mistreating its clients.
During the FTX drama’s hot news cycle, Ripple CEO Brad Garlinghouse wanted to draw attention to another incident involving traditional finance’s wrongdoings. According to Garlinghouse, a $3.7 billion fine for Wells Fargo bank’s negligence was “barely a blip on the radar.”
In a tweet on December 21, the CEO of Ripple voiced his dissatisfaction with the lack of public attention given to the Wells Fargo incident.
The United States Consumer Financial Protection Bureau (CFPB) ordered Wells Fargo to pay $1.7 billion in civil penalties and more than $2 billion in consumer redress on December 20. The CFPB claims that the bank’s actions caused its clients to suffer financial losses amounting to billions of dollars and, in the case of thousands of clients, the loss of their homes and automobiles.
For several years, Wells Fargo routinely charged its customers inaccurate fees and interest rates on auto and home loans, illegal surprise overdraft fees, and incorrect charges to checking and savings accounts. There are 16 million subscribers affected by this situation.
In his statement, CFPB Director Rohit Chopra said:
“Wells Fargo’s rinse-repeat cycle of violating the law has harmed millions of American families. The CFPB is ordering Wells Fargo to refund billions of dollars to consumers across the country. This is an important initial step for accountability and long-term reform of this repeat offender.”
One of the biggest banks in America, with a capitalization of $156,6 billion, has previously broken the law and mistreated clients. This time wasn’t the first. It received a $185 million fine from the CFPB in 2016 for opening many fake savings accounts on behalf of its customers without getting their permission. Wells Fargo committed to paying $3 billion by 2020 to settle any potential legal problems it might have caused, both criminal and civil.