Fed Hits Wells Fargo With Record $85M Fine

Bank accused of mortgage abuses
By Rob Quinn,  Newser Staff
Suggested by crafter67
Posted Jul 21, 2011 3:31 AM CDT
A protester holds an image of Wells Fargo CEO John Stumpf during a rally to call attention to big bank bailouts and cuts in jobs and education.   (AP Photo/Kathy Willens)
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(Newser) – Wells Fargo has agreed to cough up $85 million to settle allegations that it steered borrowers with good credit towards expensive subprime mortgages and falsified information on borrowers' income on loan documents. The Federal Reserve says the fine, the first levied in relation to the predatory big-bank practices blamed for the housing bubble, is the largest that it has ever issued under its consumer-protection authority, CNN reports.

Wells Fargo—which did not admit any wrongdoing—was also ordered to compensate up to 10,000 affected customers. The bank said the allegations stem from the actions of a few employees at its subsidiary Wells Fargo Financial, which closed last year. "The alleged actions committed by a relatively small group of team members are not what we stand for at Wells Fargo," chief executive John Stumpf said.

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