Wells Fargo to pay $2 billion in penalties for alleged loan misconduct
Wells Fargo will pay $2.09 billion to settle a case in which the bank was accused of misrepresenting mortgage loan quality, the Department of Justice announced Wednesday.
The bank was under investigation for allegedly creating and selling loans that it knew contained misleading information about buyer incomes, reports CNBC. Wells Fargo did not admit to liability in the settlement, which regarded activity over the past decade.
"Abuses in the mortgage-backed securities industry led to a financial crisis that devastated millions of Americans," said Alex Tse, the acting U.S. Attorney for the Northern District of California, reports Bloomberg. Tse announced the penalty fines in a statement, continuing on to say that "today's agreement holds Wells Fargo responsible for originating and selling tens of thousands of loans that were packaged into securities and subsequently defaulted."
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Wednesday's fine was separate from previous financial penalties levied against the bank for forcing customers into buying insurance they didn't need.
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Summer Meza has worked at The Week since 2018, serving as a staff writer, a news writer and currently the deputy editor. As a proud news generalist, she edits everything from political punditry and science news to personal finance advice and film reviews. Summer has previously written for Newsweek and the Seattle Post-Intelligencer, covering national politics, transportation and the cannabis industry.
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