Wells Fargo Illegally Repossessed Hundreds of Vehicles Belonging to Members of the Armed Forces
The bank will pay millions to settle charges of mistreatment of service members
Embattled bank Wells Fargo will pay a fine of $4.1 million to settle charges filed by the Justice Department alleging that it seized 413 vehicles owned by members of the armed forces without a court order, violating federal law.
The Justice Department claims that these unlawful repossessions occurred from 2008 until 2015. The first complaint the department received came from a North Carolina-based Army National Guardsman who stated that Wells Fargo seized his vehicle while he was making preparations to deploy to Afghanistan. Then, says the department, the bank auctioned the car and attempted to collect $10,000 from the Guardsman's family.
Wells Fargo will pay $10,000 to each service member affected, as well as lost equity in the vehicles including interest, and repair their credit.
The Office of the Comptroller of the Currency fined the bank an additional $20 million for violating three provisions of the same law by denying certain banking protections to service members, including capping interest rates for them at six percent. The Office claims that those violations started in 2006.
Wells Fargo issued a statement apologizing for not following through on its commitment of making sure that all members of the military "receive the appropriate benefits and protections."
"We have been notifying and fully compensating customers and will complete this work in 60 days," it said.
The news about the fines was announced as Wells Fargo CEO John Stumpf was testifying before the House Financial Services Committee regarding the millions of unauthorized accounts opened by bank employees, as well as claims that it fired employees who reported the unethical practices as retaliation.
Wells Fargo is also being sued by shareholders, former employees, and customers.