Wells Fargo Bank will pay a $2 million penalty and provide another $2 million in direct consumer restitution payments for violations uncovered by a New York Department of Financial Services (DFS) examination of the bank's former affiliate, according to New York Gov. Andrew M. Cuomos office.
New York regulators found that the Wells Fargo affiliate illegally took interests in borrowers' homes in exchange for extending credit for routine credit card purchases. The examination specifically found that the affiliate secured loans made through its Nowline Visa Platinum Credit Card Account product with an interest in borrowers homes.
A copy of the consent order between the affiliate and DFS is available here.Benjamin M. Lawsky, superintendent of DFS, said the violations created "substantial and undue risks for consumers and that the penalty will provide direct relief to New York consumers. "New Yorkers deserve to trust who they do business with and because of this aggressive investigation, individuals and families across the state will be justly compensated,"added Cuomo.
Borrowers also will receive future interest rate reductions of 2% on their balances going forward, which is estimated to provide additional relief of approximately $300,000 total. Wells Fargo also will release any security interest or liens they hold in New York homes related to the Nowline Visa Platinum Credit Card Account.