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.”


Should CFPB have more supervision over credit agencies?