Wells Fargo will pay $2.09 billion to settle allegations that the bank offered residential mortgage loans based upon inaccurate income information, the Department of Justice announced on Wednesday.
“This settlement holds Wells Fargo accountable for actions that contributed to the financial crisis,” acting Associate Attorney General Jesse Panuccio said in a statement. “It sends a strong message that the Department is committed to protecting the nation’s economy and financial markets against fraud.”
Wells Fargo has suffered since admitting in 2015 that thousands of its employees created more than 3 million unauthorized customer accounts as a ploy to meet sales quotas. Wednesday’s fine follows a prior $1 billion settlement in April related to the company selling insurance to some auto borrowers that was not required.
Amid an attempt by CEO Timothy Sloan to improve Wells Fargo’s profitability following the string of scandals, the San Francisco-based lender earlier this month reported lower net income for the three months through June. Customer dissatisfaction helped to decrease revenue at Wells Fargo’s consumer banking unit to $2.49 billion.
The Federal Reserve previously imposed size restrictions on the bank, a move that Wells Fargo warned could reduce its profits by $400 million.
