Elizabeth Warren recently called Wells Fargo's CEO "gutless," and members of the US military may soon feel that way about the entire company. CNN reports that the bank will pay out $24 million for illegally repossessing 413 cars from military service members from 2008 to 2015. Each of the affected former car owners will receive $10,000, plus the car's lost equity (with interest), and the bank will also help them restore their credit if it got messed up during the seizures, which were done without a court order—a federal offense. Besides doling out that $4.1 million, the bank will need to pony up another $20 million to pay a government fine for violations that go back to 2006 of three other parts of the same federal law, including not keeping to the 6% interest-rate cap that military members are promised.
The Los Angeles Times notes that, per the Servicemembers Civil Relief Act, a court order is needed for repossession if the service member obtained a loan before entering the military. "We all have an obligation to ensure that the women and men who serve our country in the armed forces are afforded all of the rights they are due," US Attorney Eileen Decker says. The settlement was spurred after Army National Guardsman Dennis Singleton's car was repo'ed in 2013, right before he deployed to Afghanistan. His car was auctioned, but the bank still tried to collect a $10,000 balance; he bought a new car with savings when he returned in 2014, CNNMoney notes. "It's going against my credit. Honestly, I just think it sucks," he says. Wells Fargo, meanwhile, says in a statement: "We have been notifying and fully compensating customers and will complete this work in 60 days." (Read more Wells Fargo stories.)