CBJ — Wells Fargo, one of America’s largest banks, has agreed to pay a US$2.1 billion fine to settle allegations it misrepresented the types of mortgages it sold to investors during the housing bubble that ultimately led to the 2008 financial crisis.
The fine is smaller than those paid by Bank of America, Citigroup and Goldman Sach. Wells Fargo is one of the last remaining big banks to settle charges related to its role in the subprime mortgage crisis.
The fine is unrelated to the more recent scandals that have plagued Wells in the last three years, such as the opening of millions of fake accounts for customers without their authorization in order to meet unrealistic sales quotas.
The U.S. Department of Justice said Wells Fargo sold at least 73,500 loans that had poor underwriting standards to investors. Half of those loans defaulted, resulting in billions of dollars in losses to investors.
Shared from The Canadian Business Journal
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