On Friday, Wells Fargo agreed to pay $1 billion to settle allegations that it engaged in mortgage and loan violations that caused its customers to pay extra fees. The settlement, the largest ever announced by the Consumer Financial Protection Bureau, involved claims that the bank charged customers for car insurance without their knowledge and charged some borrowers for extensions on their mortgages despite the fact that customers weren’t responsible for those delays.
Here’s what you need to know about the settlement:
- The bank will pay about $182 million to car loan borrowers who were impacted by the scheme, with some checks already going out last August.
- Mortgage borrowers who were assessed the fees ($98 million in total) from September 16, 2013 to February 28, 2017, will get refunds plus interest.
- The bank is expected to adjust its first-quarter 2018 earnings to include a $800 million reduction in net income from figures that it previously reported.
- This is the second big scandal in two years for the banking giant–in 2017, it acknowledged that it created 3.5 million bank and credit-card accounts not authorized by customers. For that, it paid $185 million in penalties.