In May, Wells Fargo agreed to pay $480 million to settle a class-action securities fraud lawsuit brought by investors who alleged the bank made misstatements and omissions in its disclosures about sales practices.
The bank is accused of opening thousands of unauthorized accounts in New Mexico, enrolling customers into online banking services without their knowledge or consent and improperly charging auto loan customers for force-placed and unnecessary collateral protection insurance.
"Wells Fargo customers entrusted their bank with their livelihood, their dreams, and their savings for the future", said Becerra.
Finally, the states alleged that Wells Fargo improperly charged residential mortgage consumers for rate lock extension fees.
Failed to ensure that customers received proper refunds of unearned portions of optional Guaranteed Asset/Auto Protection (GAP) products sold as part of motor vehicle financing agreements.
According to Wells Fargo's policy at the time, the Rate Lock Extension Fee was charged to customers if their home loan did not close during the rate lock period defined in the loan contract. "This is an incredible breach of trust that threatens not only the customer who depended on Wells Fargo, but confidence in our banking system". Beshear and the states allege the bank imposed aggressive and unrealistic sales goals on bank employees, and implemented an incentive compensation program where employees could qualify for credit by selling certain products to customers.
The state of Utah will receive $10 million in the settlement, paid to the Utah Division of Consumer Protection, said Francine A. Giani, executive director of the Utah Department of Commerce. "Fortunately, both federal and state authorities have interceded to remedy Wells Fargo's misconduct".
As part of previous settlements, Wells Fargo will also pay over $1 billion in civil penalties to the federal government and about $600 million to consumers.
Wells Fargo will create and maintain a website for consumers to use to access the program and will provide periodic reports to the states about ongoing restitution efforts.