By Gideon Weissman, U.S. PIRG
The Consumer Financial Protection Bureau (CFPB) is the first federal agency devoted to protecting consumers in the financial marketplace. In 2016, the CFPB held Wells Fargo accountable for unfair treatment of its customers.
From at least 2011 to 2016, Wells Fargo systematically opened up millions of unauthorized accounts in its customers’ names. The scheme was wide-ranging and complex. Wells Fargo staff opened up bank accounts, applied for credit cards, transferred funds, created phony email addresses, and more, without customer consent. These unauthorized accounts cost customers millions of dollars — both through fees (like maintenance fees, nonsufficient fund fees, and overdraft charges), and by damaging customer credit reports.
Some of the bad practices at Wells Fargo were originally uncovered in a 2013 report published in the Los Angeles Times. After concluding its own investigation, the CFPB found that Wells Fargo had broken the law and engaged in unfair and deceptive practices. The CFPB’s subsequent enforcement action against Wells Fargo did the following:
- Imposed a $100 million fine (Wells Fargo had to pay an additional $85 million to the Office of the Comptroller of the Currency and to the City and County of Los Angeles).
- Forced Wells Fargo to refund any fees that its customers paid as a result of the account scheme, which the CFPB estimated would amount to $2.5 million.
- Required Wells Fargo to hire an independent consultant to ensure that, in the future, the bank would practice proper sales practices.
The enforcement action the CFPB took against Wells Fargo was one of many times the CFPB has required banks and other financial companies to pay fines and compensate customers for wrongdoing. Today, the CFPB continues to monitor the nation’s largest banks for mistreatment of consumers, through routine inspections and by analyzing complaints submitted to the Consumer Complaint Database.