WASHINGTON (Legal Newsline) — The Consumer Financial Protection Bureau (CFPB) has announced a $100 million fine against Wells Fargo.
Wells Fargo allegedly allowed the widespread illegal practice of secretly opening up credit card and deposit accounts in consumers’ names. Since employees received bonuses for reaching certain sales targets and compensation incentives, they would purportedly open accounts and fund them by transferring money from consumers’ authorized accounts without knowledge or consent.
These alleged transactions often incurred fees that were forced upon the consumers. The CFPB alleged that, by Wells Fargo’s own analysis, employees opened more than 2 million deposit and credit card counts not authorized by consumers.
“Wells Fargo employees secretly opened unauthorized accounts to hit sales targets and receive bonuses,” CFPB Director Richard Cordray said. “Because of the severity of these violations, Wells Fargo is paying the largest penalty the CFPB has ever imposed. [This] action should serve notice to the entire industry that financial incentive programs, if not monitored carefully, carry serious risks that can have serious legal consequences.”
In addition to the $100 million fine, the bank will pay $35 million to the Office of the Comptroller of the Currency, and another $50 million to the city and county of Los Angeles.