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Wells Fargo Overdraft Lawsuit 2020 – [1/2] Wells Fargo logo in New York City, USA Accessed on January 10, 2017. /Stephanie Keith/File Photo/File Photo
May 6 () – Wells Fargo & Co (WFC.N), the fourth largest U.S. A federal judge on Friday dismissed a class-action lawsuit alleging the bank misled or defrauded shareholders about its commercial loans.
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U.S. District Judge William Allsup in San Francisco said the shareholders failed to properly allege that Wells Fargo unreasonably inflated the quality of its loans, understated loss reserves or misrepresented its lending practices.
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In 2020, shareholders said they lost billions of dollars in Wells Fargo stock as the San Francisco bank gradually revealed “previously unknown levels of risk” in its commercial loans.
The proposed class includes shareholders during the three years ending October 13, 2020, during which Wells Fargo’s stock price declined 54%.
But the judge concluded that Wells Fargo had underwriting standards that proved to be “largely accurate or conservative, non-inflationary” and did not mislead shareholders about the size of the loans relative to the value of the borrowers’ businesses.
Because he found no false or misleading statements, Allsup did not address whether Wells Fargo intended to defraud anyone.
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He said shareholders of the Hawaii State Employees Retirement System could file an amended complaint to address the deficiencies in their case.
A lawyer for the shareholders did not immediately respond to requests for comment. Wells Fargo and its attorneys did not immediately respond to similar requests.
Beginning in 2018, Wells Fargo Federal Reserve and two other US banks will improve governance and oversight. Operates with the consent of the Financial Regulatory Authority. The Fed limits bank assets to $1.95 trillion.
The bank has faced mounting criticism since 2016 over its practices, including opening accounts without customers’ permission and charging borrowers for auto insurance they didn’t need.
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The case of Hawaii State Employees’ Retirement System v. Wells Fargo & Co., U.S. DISTRICT COURT, NORTHERN DISTRICT OF CALIFORNIA, NO. 20-07674. The United States Consumer Financial Protection Bureau (CFPB) slapped Wells Fargo & Co. The watchdog’s largest civil penalty as part of a $3.7 billion settlement to settle allegations of widespread abuse of car loans, mortgages and bank accounts.
On Tuesday, the consumer watchdog ordered the bank to pay a $1.7 billion civil penalty and another $2 billion to repair the accounts of more than 16 million customers affected by the breach, the regulator said in a statement.
The bank illegally charged fees and interest on auto loans and mortgages, illegally repossessed vehicles and charged illegal, unexpected overdraft fees, among other problems, the CFPB said.
“Wells Fargo is a corporate repeat that threatens to harm a third of American households,” CFPB Director Rohit Chopra told reporters at a briefing.
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He said regulators should consider whether to impose additional limits on banks beyond the $1.95 trillion in assets set by the Federal Reserve in 2018, which Federal Reserve Chairman Jerome Powell has said will remain in place until the institution’s problems are resolved.
“While we do not see today’s action as a direct call for the asset limit and its possible removal, we take today’s announcement as a sign of positive progress toward that ultimate goal,” Jefferies analyst Ken Usdin wrote in a note.
Wells Fargo said the settlement addresses issues that have been pending for several years, and said in a statement that it has “expedited corrective actions and resolutions” beginning in 2020.
“This far-reaching agreement is a milestone in our work to transform operating practices at Wells Fargo and put these issues behind us,” the bank’s Chief Executive Officer Charlie Scharf said in a statement.
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The fine for Wells Fargo is the latest in a series of actions that underscore the CFPB’s more aggressive stance under President Joe Biden’s administration.
Fighting corporate restructuring has become a priority under Biden, who enters the White House in early 2021. Last year, the Department of Justice enacted a series of policy changes aimed at better preventing repeat abuse.
Wells Fargo has faced multiple enforcement actions from the CFPB and other banking regulators for violations in areas of the bank’s operations. There are currently nine open consent orders against the company.
Wells Fargo also remains under an unprecedented $1.95 trillion asset cap, as well as consent orders with regulators stemming from the sales scandal that erupted publicly in September 2016.
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In 2020, the Office of the Comptroller of the Currency (OCC) banned former Wells Fargo CEO John Stump from banking and fined him $17.5 million to settle allegations of sales misconduct.
Since then, Wells Fargo’s management team and board have changed dramatically, implementing new incentives and risk management mechanisms. Scharf became CEO in 2019, the fourth person to lead Wells Fargo since the scandal emerged.
Chopra said the agreement does not grant immunity to any individual, though officials declined to elaborate.
“We’ve made significant progress over the last three years and are a different company today,” Scharf said. “We are committed to doing the right thing for our customers.”
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Litigation, consumer redress and regulatory matters “could cause significant additional costs in the coming quarters,” Wells Fargo said in its third-quarter earnings presentation. It will announce the results of the fourth quarter on January 13. Sep 14 () – Wells Fargo & Co ( WFC.N ) reached a $94 million settlement to resolve class-action lawsuits that more than 200,000 struggling mortgage borrowers were sent into forbearance due to the COVID-19 pandemic without their consent.
The proposed settlement was filed last week in federal court in Columbus, Ohio, and requires a judge’s approval.
It also addresses allegations that Wells Fargo unilaterally decided to extend a forbearance to consumers who inquired about or reported difficulties with their mortgages but did not openly ask for and seek help.
Consumers say Wells Fargo’s decision has hurt their credit, making it harder or more expensive to get a loan and preventing them from refinancing at historically low interest rates.
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He said the decision violates the March 2020 federal financial stimulus CARES Act related to Covid-19, which provides forbearance at the request of borrowers.
The Sept. 9 settlement covers approximately 212,000 to 213,000 loans serviced by San Francisco-based Wells Fargo and placed without informed consent between March 1, 2020 and December 31, 2021.
Wells Fargo, the fourth-largest US bank, has denied wrongdoing by agreeing to a settlement. It had no immediate comment Wednesday.
The first $35 million from the settlement will be disbursed on a pro rata basis at an average of $165 per loan.
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Attorneys for Wells Fargo clients can seek up to $23.5 million in legal fees or 25% of the settlement fund.
Wells Fargo is still reeling from a six-year-old scandal over its sales practices, including opening millions of accounts without authorization.
As of 2018, it has three U.S. Work towards strengthening governance and supervision under the Consent Orders of Financial Regulatory Authorities. The Federal Reserve also limited bank assets.
The case of Echard v Wells Fargo Bank NA, U.S. DISTRICT COURT, SOUTHERN DISTRICT OF OHIO, NO. 21-05080. The class-action lawsuit alleges that Wells Fargo Bank “through a deceptive pattern and practice” tricked people into buying back their foreclosed homes with unused risk insurance premiums.
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The Kansas plaintiffs allege that Wells Fargo engaged in a scheme to take advantage of homeowners by adding the cost of hazard insurance to the settlement price of foreclosed homes.
“Wells Fargo unjustly enriches itself and misleads financially vulnerable individuals, homeowners who have lost their homes in foreclosure and are trying to get their homes back and rebuild,” the complaint states.
Wells Fargo bought the plaintiffs’ homes in a 2012 foreclosure. In the process of buying back the properties, the plaintiffs say Wells Fargo charged them “additional costs to maintain and maintain the properties.”
Kansas law allows homeowners with a foreclosure judgment to foreclose on their property within three months or a year, depending on the balance remaining on the loan, according to the filing.
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“Sometimes [Wells Fargo] purchases hazard insurance to protect the property after the sale,” the complaint explains. “Wells Fargo typically buys coverage for the entire year, although coverage can be purchased for shorter terms,” policies can be for up to one month.
The class-action lawsuit alleges that Wells Fargo did not disclose the specifics of these risk insurance policies and did not refund unused premiums, as is standard practice, the filing alleges.
Repossession homeowners are unknowingly charged the full value as part of the settlement, even when the repossession occurs less than 12 months after foreclosure,” the class action lawsuit states.
Furthermore, plaintiffs argue that these annual risk premiums are never measurable after the home is paid off.
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“Wells Fargo and its advisers willfully and deliberately chose not to insure the risk as part of their wrongful scheme,” the plaintiffs said.
As a result, the plaintiffs were charged the “full value” of the one-year hazard insurance policy, even though the assets had been paid off months earlier, the class action alleges.
Plaintiffs allege that Wells Fargo reimbursed the insured for these risk insurance policies.
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