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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Wells Fargo and Company | NYSE:WFC | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.30 | 0.50% | 59.82 | 60.15 | 59.32 | 60.12 | 15,354,024 | 01:00:00 |
By Alan Zibel
WASHINGTON-- Wells Fargo & Co. on Thursday agreed to pay $34.8 million to settle allegations it received payments from a title firm in exchange for business, as a U.S. regulator scrutinizes such relationships in the real-estate industry.
As part of the same action, J.P. Morgan Chase & Co. agreed to pay $900,000. The banks settled civil claims 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 $10.8 million in compensation to consumers. J.P. Morgan agreed to pay a $600,000 fine and $300,000 to consumers.
The case underscores a CFPB effort to scour the real-estate industry for payments tied to business referrals, which are illegal under federal law.
The joint settlement with J.P. Morgan and Wells is the largest case to date brought by the CFPB over the issue.
The CFPB said loan officers at both banks participated in a scheme with a now-defunct Owings Mills, Md.-based title company, Genuine Title LLC.
Under the arrangement, officials said, the title firm from 2009 to 2013 provided cash payments and referrals of potential mortgage customers in exchange for title services.
Genuine Title bought data on consumers who were likely to refinance their loans and provided them to loan officers at Wells and J.P. Morgan, according to a court document. More than 100 loan officers from at least 18 Wells Fargo branches participated, as did six Chase loan officers, the CFPB said.
"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.
In settlement documents, the banks didn't admit or deny the allegations. Spokesmen for both lenders said they fired loan officers tied to the arrangements.
"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."
An unidentified lender participated in the scheme and reported its behavior to the regulator, the CFPB said. The regulator said it completed its investigation of that company with no enforcement action due to the institution's cooperative behavior.
Write to Alan Zibel at alan.zibel@wsj.com
Corrections & Amplifications
Under the settlement, Wells Fargo agreed to pay $10.8 million in compensation to consumers. A previous version of this story incorrectly said that figure was $11.1 million. (Jan. 22, 2015)
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