The Consumer Financial Protection Bureau (CFPB) and Wells Fargo & Co. (NYSE: WFC) have reached a settlement requiring the bank to pay more than $2 billion in restitution and $1.7 billion in fines for illegal interest charges and fees on home and car loans, unlawful repossession of automobiles and loan payments that were applied to the wrong accounts. The illegal conduct occurred at least between 2010 and 2022, according to a statement by CFPB chief Rohit Chopra.

In his prepared remarks, Chopra called the bank a “corporate recidivist that puts one-third of American households at risk of harm,” citing previous penalties assessed to the bank totaling nearly $1.13 billion. In 2015, $24 million for the bank’s role in an illegal kickback scheme; in 2016, $4 million for “scamming student loan borrowers” and $100 million for the fake account fraud; in 2018, $1 billion for illegal fees and insurance practices in its car and mortgage lending business. The bank also paid $3 billion to resolve civil and criminal investigations into its fake-account scandal.

Chopra noted that Tuesday’s consent order may not be the end of Wells Fargo’s problems. The order “does not provide immunity for any individuals, nor, for example, does it release claims for any ongoing illegal acts or practices.” But there is some good news for the bank in the 32-page consent order.

For example, according to the CFPB, “Since 2020, [Wells Fargo] has accelerated corrective actions and remediation, including to address these violations.” CEO Charlie Scharf commented:

As we have said before, we and our regulators have identified a series of unacceptable practices that we have been working systematically to change and provide customer remediation where warranted. This far-reaching agreement is an important milestone in our work to transform the operating practices at Wells Fargo and to put these issues behind us. Our top priority is to continue to build a risk and control infrastructure that reflects the size and complexity of Wells Fargo and run the company in a more controlled, disciplined way.

Wells Fargo expects to report a fourth-quarter pre-tax operating loss of $3.5 billion. The expected loss includes “the incremental costs of the CFPB civil penalty and related customer remediation as well as amounts related to outstanding litigation matters and other customer remediation.”

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The CFPB terminated its April 2016 consent order as part of the new agreement and clarified when its 2018 consent order with the bank will terminate.

The new consent order will terminate either 180 days after the bank confirms that it has met the terms of the order or three years from its effective date, whichever is earlier.

Wells Fargo’s good news is that the agreement eliminates the last major overhang from the scandals that rocked the bank in the previous decade. Getting the Federal Reserve to lift the cap on the bank’s assets that the Fed imposed in 2018 is the next big step, and that could come in the first half of next year.

Chopra, though gets the last word. Tuesday’s agreement “should not be read as a sign that Wells Fargo has moved past its longstanding problems or that the CFPB’s work here is done.” He goes on:

Over the past several years, Wells Fargo executives have taken steps to fix longstanding problems, but it is also clear that they are not making rapid progress. We are concerned that the bank’s product launches, growth initiatives, and other efforts to increase profits have delayed needed reform. We will continue our work with the other federal banking regulators to end the rinse-repeat cycle of consumer abuse at this firm.

Wells Fargo stock traded up about 1% in Wednesday’s premarket session.

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