Prosecutors say those incentives led Wells Fargo Community Bank employees to submit applications on behalf of millions of customers, without their knowledge or consent, for life insurance and renter's insurance policies, checking, savings, credit card and debit card accounts, and online banking and online bill pay.
The attorney general's office stated that Wells Fargo entered into the settlement over alleged unfair and deceptive trade practices.More news: Japan to Restart Commercial Whale Hunts in 2019
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"I think that this is an important precedent for state attorney generals in enforcing consumer laws and other laws against national banks". "Instead of safeguarding its customers, Wells Fargo exploited them, signing them up for products - from bank accounts to insurance - that they never wanted".
Failing to ensure that customers received refunds of unearned premiums on certain optional auto finance products.
Reuters reported that the settlement would also cover allegations of improper insurance referrals and auto loan insurance, in addition to wrong mortgage rate lock extension fees. "This is an incredible breach of trust that threatens not only the customer who depended on Wells Fargo, but confidence in our banking system". With rate lock extension, borrowers could "lock in" an ostensibly favorable interest rate, for a fee, even if their loans did not close within the defined rate lock period. And it will pay roughly $600 million in restitution to consumers affected. "Fortunately, both federal and state authorities have interceded to remedy Wells Fargo's misconduct". In February, the Federal Reserve levied an unprecedented penalty against the bank, blocking its ability to grow larger, and the bank paid an US$1 billion settlement to other federal regulators in April. Additionally, under an order from the Federal Reserve, the bank is required to strengthen its corporate governance and controls, and is now restricted from exceeding its total asset size.