Wells Fargo pays $575 million to settle state investigations

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"Wells Fargo's corporate culture led to repeated breaches of its customers' trust", said Attorney General Grewal.

California, Wells Fargo's home state, will get more than a quarter of the settlement funds because of the number of customers living there.

Under the new agreement announced on Friday, the bank will also create teams to review and respond to customer complaints about its banking and sales practices.

Wells Fargo & Co WFC.N will pay $575 million to settle claims made by USA states that the bank created phony accounts and committed other customer abuses, according to a statement by the Iowa attorney general's office. The states determined that some bank branches were charging rate lock extension fees even when the delay was caused by Wells Fargo, a practice contrary to the company's policy.

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The settlement ends wide-ranging investigations that began in 2016 when Wells Fargo acknowledged firing 5,000 employees for opening sham accounts customers didn't want in order to meet the bank's aggressive sales goals and qualify for bonuses.

"I think that this is an important precedent for state attorney generals in enforcing consumer laws and other laws against national banks". "The almost $2.8 million we secured is a sizable amount for our General Fund, and could be used for important causes such as new textbooks for our school children".

Two years ago, Wells Fargo agreed to pay $190 million to settle federal government claims that the bank created phony customer account, and improperly referred and charged customers for various financial services products. In addition, Wells Fargo improperly submitted more than 6,500 renters insurance and/or simplified term life insurance policy applications and payments from customer accounts without the customers' knowledge or consent. "Fortunately, both federal and state authorities have interceded to remedy Wells Fargo's misconduct". More information on the redress review program, including Wells Fargo escalation phone numbers and the Wells Fargo dedicated website address for the program, will be available on or before February 26, 2019.

The $17 million Wells Fargo payout to New Jersey is the sixth highest amount recovered among all jurisdictions participating in the multi-state settlement.

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