Wells Fargo will pay a total of $3.7 billion to address “widespread mismanagement” of auto loans, mortgages, and deposit accounts as part of a settlement with the Consumer Financial Protection Bureau (CFPB).

The CFPB and Wells Fargo announced a consent order Tuesday that required the bank to pay a $1.7 billion fine and return $2 billion to millions of customers who were harmed by its alleged misconduct. The CFPB said in a press release Wells Fargo unlawfully repossessed customer vehicles, improperly denied mortgage modifications that led to wrongful foreclosures, illegally charged surprise overdraft fees, and unlawfully froze customer accounts from at least 2011 through 2022.

Labeling Wells Fargo a “corporate recidivist,” CFPB Director Rohit Chopra said in prepared remarks the order represents the regulator’s attempt to find “a permanent resolution to this bank’s pattern of unlawful behavior.” He called the settlement “a milestone in accountability and reform of Wells Fargo.”

Chopra noted the CFPB might still seek to pursue wrongdoing by individuals and the consent order does not release any claims for ongoing illegal acts or practices.

“We see this as an initial step to bring relief quickly to families who had their cars illegally possessed, who were tricked into seeing their accounts drained by illegal junk fees, and who had their accounts frozen without cause,” he said.

The enforcement action provides an exclamation mark for Chopra’s tenure in charge of the CFPB, which has shown a markedly different posture for doling out penalties than it did under President Donald Trump.

This year, the agency fined Bank of America $225 million for freezing unemployment benefits during the pandemic and fined Regions Bank $191 million for issuing surprise overdraft fees. It has sued so-called “repeat offenders” like MoneyGram and TransUnion for violating consumer protection laws while simultaneously defending its funding mechanism in federal court. All these large penalties are in line with predictions the CFPB under Chopra would be more aggressive.

Wells Fargo has a lengthy history of run-ins with the CFPB, including:

Wells Fargo has already provided $1.3 billion in remediation to more than 11 million auto loan customers, according to the CFPB’s order, which noted since 2020 the bank “has accelerated corrective actions and remediation, including to address these violations.”

The CFPB ended a 2016 consent order with Wells Fargo on student loan servicing and provided the bank further clarity on when its 2018 consent order on lending practices will end, Wells Fargo said Tuesday in a news release.

“We have made significant progress over the last three years and are a different company today,” Wells Fargo Chief Executive Charlie Scharf said in the release. “We remain committed to doing the right thing for our customers and working closely with our regulators and others to deal appropriately with any issue that arises.”

The bank noted since 2019 it has changed the way it operates by:

  • Creating four new enterprise functions “to enable greater oversight and transparency”;
  • Making significant changes to leadership, replacing 12 of 17 operating committee members and more than half the leaders directly below the operating committee;
  • Embedding greater accountability for risk management into performance management and compensation practices;
  • Strengthening its ability to identify and mitigate operational risks;
  • Establishing a new control management organization and program; and
  • Launching an office of consumer practices, which it described as “an enterprise-wide, consumer-focused advisory group designed to help ensure the consumer’s voice is heard in the decision-making across the consumer product lifecycle.”

Wells Fargo was fined $3 billion by the Department of Justice and Securities and Exchange Commission regarding its fake accounts scandal less than three years ago.