Feds continue to probe Wells Fargo despite $1.2bn settlement

by Ryan Smith25 Feb 2016
Apparently a billion-dollar payout isn’t enough to stop federal probes. Wells Fargo reported Wednesday that it’s still facing federal and state-level mortgage investigations, even after agreeing to a $1.2 billion settlement to resolve allegations of misconduct in its mortgage lending, according to a Reuters report.

In its annual 10-K filing, Wells Fargo said it’s still facing “investigations or examinations of certain mortgage related practices” from federal and state agencies, “including the United States Department of Justice.”

Earlier this month, the banking giant agreed to pay $1.2 billion to resolve a 2012 lawsuit filed by the Manhattan U.S. Attorney’s Office, according to Reuters. That agreement has not yet been finalized.

The lawsuit accused Wells Fargo of “reckless” origination and underwriting practices. It also alleged that the bank had failed to report that more than 6,000 loans made between 2002 and 2010 didn’t meet requirements for Federal Housing Administration insurance, Reuters reported.  

The settlement agreement Wells Fargo made with the Manhattan U.S. Attorney’s Office would also resolve claims by the Department of Housing and Urban Development and the San Francisco U.S. Attorney’s Office, Reuters reported. But apparently it’s not enough to end every investigation.

So far, Wells Fargo has paid significantly less in mortgage-related penalties than other big banks like JPMorgan Chase and Bank of America, Reuters noted.
 
 

COMMENTS

  • by Mike Waling | 2/25/2016 3:24:21 PM

    So who does the Government (CFPB, DOJ, etc.) thinks pays those fines? Everyone, except the government obviously, they are passed on to the consumer, duh...
    And who benefits from these fines? Well, they certainly don't reimburse the injured party - the consumer. But at least the employees get raises & year end bonuses so we should be happy with that!


  • by Ken D | 2/25/2016 4:45:29 PM

    Government Zombies keep coming for more-

  • by | 2/25/2016 8:42:35 PM

    If there is no penalty then what's to stop them from doing it all again? They are already packaging crappy investments and selling them as solid bets...same crap they did pre-2008 crash. Big banking lobby has so many politicians in its pocket they'll never play by the rules.

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