U.S.: Wells Fargo illegally repossessed 413 servicemembers’ cars
NEW YORK — Wells Fargo will pay $24 million to settle allegations that it mistreated members of the military — including illegally repossessing their cars.
The bank, already reeling from a scandal over fake accounts, will pay $4.1 million to settle Justice Department charges that it seized 413 cars owned by servicemembers without a court order, a violation of federal law.
The Justice Department said the illegal repossessions took place from 2008 to 2015. The first complaint came from an Army National Guardsman in North Carolina who said the bank seized his car while he was preparing to deploy to Afghanistan.
Wells Fargo then auctioned his car and tried to collect a balance of $10,000 from his family, the Justice Department said.
The bank will pay $10,000 to each of the affected servicemembers, plus lost equity in the cars with interest, and repair their credit.
The bank was fined $20 million more by the Office of the Comptroller of the Currency for breaking three provisions of the same law by denying members of the military certain banking protections, including capping their interest rates at 6%. Those violations began in 2006, the OCC said.
The bank did not immediately respond to a request for comment.
News of the penalties came as Wells Fargo and CEO John Stumpf faced the wrath of the House Financial Services Committee at a hearing about the millions of fake bank and credit card accounts, plus claims that it retaliated against whistleblowers.
The company is also facing lawsuits from shareholders, former employees and customers.