Wells Fargo fined $185 million for illegallly opening bank accounts

Minnesota’s attorney general sent a letter to Wells Fargo CEO John Stumpf on Tuesday, demanding the bank drop a pre-dispute arbitration clause that currently forces victims of the sham account scandal into arbitration.

- Wells Fargo was fined $185 million Thursday by California and federal regulators for allegedly opening millions of unauthorized accounts. 

In a statement, the Consumer Financial Protection Bureau said Wells Fargo sales staff opened more than two million bank accounts and credit cards and transferred money into those accounts without authorization from customers. The federal agency also said the employees created fake email addresses to enroll customers in online-banking services.

The CFPB accused Wells Fargo of building a poorly monitored incentive-compensation program that spurred employees to open the accounts and cards without telling customers in order to meet certain sales goals. Officials believe thousands of the bank’s employees are guilty of the illegal practice.

“Wells Fargo employees secretly opened unauthorized accounts to hit sales targets and receive bonuses,” CFPB director Richard Cordray said in a statement. “Because of the severity of these violations, Wells Fargo is paying the largest penalty the CFPB has ever imposed."

Wells Fargo will pay $100 million to the CFPB, $35 million to the Office of the Comptroller of the Currency, $50 million to the City and County of Los Angeles and restitution to the affected customers. Wells Fargo says it has already refunded $2.6 million to the affected customers for any fees associated with products they received that they may not have requested.

The $100 million fine is the largest the CFPB has had to impose since it began operating in 2011. 

According to the Associated Press, approximately 5,300 employees at Wells Fargo were fired in connection with the behavior.

“Wells Fargo is committed to putting our customers’ interests first 100 percent of the time, and we regret and take responsibility for any instances where customers may have received a product they did not request,” Wells Fargo said in a statement released Thursday.

In addition to paying the fines and restitution to their customers, Wells Fargo is also required to hire an independent consultant to conduct a thorough review of its procedures and ensure the bank is encouraging proper sales tactics. 

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