Consumer Financial Protection Bureau Imposes Penalties On Wells Fargo For Mismanagement Of Consumer Loans
Banks routinely charge people money to access their own money, and the less money you have, the more lenders charge you to borrow, and most of this is legal. It’s all written into the fine print of your loan agreement. When lenders fail to abide by the terms of the loans they have issued, however, consumers have the right to file a complaint with the Consumer Financial Protection Bureau (CFPB). Over the course of nearly a decade, the CFPB received an outsized number of complaints about Wells Fargo Bank, one of the nation’s largest issuers of consumer loans. After several years of investigation into the scope of misconduct by Wells Fargo, the CFPB ordered the bank to pay $2 billion as redress to consumers, plus another $1.7 billion in civil penalties. The CFPB will add the $1.7 billion to its victims’ relief fund, which is used to provide assistance to consumers harmed by companies’ financial misconduct. If misconduct by a lender has made your debt problems worse, contact a Boca Raton debt lawyer.
The Unjustly Denied Mortgage Modification Applications
If you are struggling to keep up with your home mortgage payments, then one of the wisest things you can do is to contact the mortgage lender before the problem gets worse and ask to modify your loan. Doing this can result in a lower monthly payment, reducing your risk of default. The CFPB investigation found that Wells Fargo routinely denied loan modifications to eligible applicants. As a result, some of the mortgages that Wells Fargo unjustly refused to modify went into foreclosure.
Mismanagement of Auto Loans
The investigation revealed that Wells Fargo mishandled more than 11 million car loans. The problems included charging excessive fees and interest and failing to give borrowers due credit for the amounts they had paid. In some cases, this led to repossession of the vehicles. Furthermore, Wells Fargo did not consistently abide by the terms of GAP contracts, which require the lender to pay the borrower a certain amount if the car is stolen or totaled while still encumbered by the loan.
Denying Consumers Access to Their Own Money
The old saying that, the less money you have, the more it costs to use your own money has many manifestations, but Wells Fargo’s mismanagement of consumers’ bank accounts presents an especially egregious example. The bank would freeze consumers’ bank accounts when this was not justified; the freezes caused customers to fall behind on payments to various creditors. In many cases, the freezes resulted from suspected fraudulent transactions. The CFPB determined, though, that it would have been appropriate to freeze only the amount of the transaction being investigated, while allowing customers to access the other funds in their accounts.
Work With a Debt Lawyer About Protecting Yourself From Lender Misconduct
A South Florida debt lawyer can help you exercise your rights regarding consumer loans such as car loans, personal loans, and home mortgages. Contact Nowack & Olson, PLLC in Boca Raton, Florida to discuss your case.