Wells Fargo & Co. will pay $575 million to settle state-level claims over the bank’s sales practices.
The settlement with 50 states and the District of Columbia announced Friday resolves state investigations into Wells Fargo’s practices from 2002 to 2017. The practices, which have previously been disclosed, including opening bogus accounts, charging improper mortgage rate-lock extension fees and forcing insurance policies on auto-lending customers.
Wells Fargo’s expenses surged over the past two years, driven by fines and legal costs as investigations into its consumer businesses multiplied. The scandal erupted in 2016 on the revelation that bank employees opened as many as 3.5 million accounts without customer approval in order to meet sales goals.
“Wells Fargo customers entrusted their bank with their livelihood, their dreams and their savings for the future,” California Attorney General Xavier Becerra said in a statement. “Instead of safeguarding its customers, Wells Fargo exploited them, signing them up for products – from bank accounts to insurance – that they never wanted.”
The bank said in a statement that it had already set aside $400 million for the settlement and would take a $175 million provision in its fourth-quarter results. The company reached a $1 billion settlement with federal regulators earlier this year over some of the issues.
“This agreement underscores our serious commitment to making things right in regard to past issues as we work to build a better bank,” Chief Executive Officer Tim Sloan said in the statement.
