Court refuses to dismiss government suit against Wells Fargo

by Ryan Smith11 Jun 2014
Looks like Wells Fargo will have to defend itself against allegations of misconduct after all. An appeals court has rejected the lender’s motion to dismiss a lawsuit accusing it of shady dealings in mortgage originations.

Wells had contended that it had already paid the government enough through its participation in a national settlement over foreclosure abuses in 2012, according to a Reuters report. The bank paid a $5 billion penalty in that lawsuit.

The government, however, insisted that the earlier settlement was for mortgage servicing abuses, not originations, and Wells must be held to account for making bad government-backed loans. on Tuesday, a three-judge panel agreed with the government, Reuters reported.

“We are disappointed with the appellate court’s ruling,” Wells Fargo spokesman Ancel Martinez said in a statement. “We look forward to presenting our case in support of our longstanding record of responsible lending.”


  • by BVG | 6/11/2014 10:21:19 AM

    Responsible lenders do not pay out $5 billion in fees/penalties related to bad mortgage practices.

  • by ArnoldCountry | 6/12/2014 6:53:23 PM

    Responsible lending? Oh you mean all of those option arms and no doc mortgages that caused the largest economic crisis since the Great Depression? I keep forgetting how much money WFB made from all those mortgages as them dumped all the risk on unsuspecting investors who thought they were investing in highly rated bonds? Oh, lets not forget all those consumers you did mortgage modifications for, under the disguise of helping them, who are now so locked into their homes they cannot move because they still owe so much more than the house is worth. Sorry Wells Fargo, your moral compass is broken... oh wait, you never had one.


Should CFPB have more supervision over credit agencies?