Wells Fargo Satisfies OCC Consent Order, Completes Payments to Servicemembers
The Office of the Comptroller of the Currency determined that Wells Fargo Auto has satisfied the requirements of a 2016 consent order levied against the lender to fix deficiencies in its compliance with the Servicemembers Civil Relief Act (SCRA), the company announced today.
The consent order alleged that Wells Fargo had illegally repossessed vehicles from military servicemembers, some of which were serving in active duty when the cars were taken from their families.
As part of the consent order, Wells Fargo expanded its SCRA Center of Excellence, which was formed to focus on military consumers and is run by many former military members. The bank is also proactively reaching out to military members about the benefits they are eligible for rather than making them submit on their own and initiated quarterly checks of the Department of Defense’s military database to identify consumers for SCRA enrollment.
The termination also confirms Wells Fargo has successfully delivered remediation funds to the 863 borrowers affected between 2008 and July 2015. The bank paid each affected borrower $10,000 and after regulatory fees the total cost to the bank came to $29.4 million, Auto Finance News previously reported.
The original consent order was found to be too narrow in scope as the Justice Department revealed in November 2017 that the number of affected consumers was more than double the initial estimates.
“Through the termination of this consent order, the OCC has validated Wells Fargo’s efforts to strengthen our processes to deliver SCRA benefits and protections proactively and consistently, enhance efforts to identify eligible customers and improve our oversight,” said Wells Fargo Chief Executive Tim Sloan in a press release. “This is another important step in our journey to fix issues, build a better bank, and most importantly ensure we are caring for the hard-working men and women who bravely serve and defend our country.”
There’s also some overlap between these military consumers and those that were illegally charged for force-placed insurance they did not need. Earlier this year, Wells Fargo agreed to a separate $1 billion consent to resolve alleged deficiencies in its force-placed insurance program as well as other mortgage-related offenses. The lender was required to submit a consumer remediation plan to regulators earlier this summer but has declined to detail those plans to Auto Finance News saying it can’t divulge “confidential supervisory information” discussed with regulators.
“We are currently working with our regulators on our CPI (collateral protection insurance) remediation plan to ensure that we make things right with all impacted customers – and that includes Service Members,” a spokeswoman told AFN.
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