Wells Fargo settles lawsuit but CEO warns “more headlines” expected

by Steve Randall07 Aug 2017
Wells Fargo said Friday that it has settled a lawsuit dating back to 2006 relating to VA loans which were originated by the lender should did not qualify for VA guarantees.

Although Wells Fargo denies the allegations in the lawsuit, it will pay $108 million to the Us government to resolve the claims made in the action, which was unsealed in 2011.

“More than six years ago, when questions about fees on Veterans Administration refinance loans were raised, we resolved those concerns by improving our internal controls and made compensation available to VA customers who closed a refinance before that time,” said Tim Sloan, Wells Fargo’s chief executive officer.

He added that settling the matter allows the company to put the matter behind it.

In a separate message to Wells Fargo employees, Mr Sloan said that rebuilding trust in the lender was his priority when he became CEO last fall due to the fallout from “unacceptable retail sales practices in the Community Bank.”

He said that rebuilding that trust means the lender must “continue to be transparent with all our stakeholders and go beyond what has been asked of us by our regulators by reviewing all of our operations—leaving no stone unturned—so we can be confident we have done all that we can do to build a better, stronger Wells Fargo.”

The leader said that he believes efforts to rebuild trust will succeed and praised employees for their hard work and commitment to that end.

He also noted that it would take time for the lender’s reputation to fully recover and warned staff to “expect more headlines as we fulfill our commitment to identify and fix problems and make things right for our customers.”

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