Wells Fargo, J.P. Morgan to Pay $35.7 Million in Settlement

By Alan Zibel 

WASHINGTON-- Wells Fargo & Co. and J.P. Morgan Chase & Co. on Thursday agreed to pay $35.7 million to settle federal and state allegations they received compensation from a real-estate firm in exchange for referrals of business.

The banks settled the allegations brought by the Consumer Financial Protection Bureau and the Maryland attorney general's office.

Under the settlement, filed in federal court for approval, Wells Fargo agreed to pay a $24 million fine as well as $11.1 million in compensation to consumers. J.P. Morgan agreed to pay a $600,000 fine as well as $300,000 to consumers.

The CFPB said the banks participated in a scheme with a now-defunct Maryland-based title company, Genuine Title. Officials said the title firm provided "kickbacks" to loan officers who referred title business to them.

"These banks allowed their loan officers to focus on their own illegal financial gain rather than on treating consumers fairly," CFPB Director Richard Cordray said in a written statement.

"We are fully committed to ensuring that our mortgage bankers comply with all legal and regulatory requirements," a J.P. Morgan spokesman said in a written statement. "These former employees clearly violated our policies, procedures and training."

A Wells Fargo spokesman said the bank "fully cooperated with the CFPB in this matter and have taken strong corrective action, including terminating team members who were involved and enhancing our procedures to provide greater oversight and monitoring of both the process and our team members."

Write to Alan Zibel at [e-mail]

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