Bank Regulation

No Breaks For Mortgage Bankers Costs Wells Fargo $97M

Wells Fargo

After workers reportedly didn’t get rest breaks, allowed by California’s strict labor rules, Wells Fargo will have to pay $97 million to private mortgage bankers and home mortgage consultants in the state based on both hourly pay and commissions, American Banker reported.

A Los Angeles-based Wells Fargo mortgage broker brought forward a lawsuit in 2017, alleging violations of state wage and hour labor violations. However, U.S. District Judge Percy Anderson threw out other claims from the individual beyond a failure to offer breaks and another on unfair competition.

The judgment includes both consultants and mortgage bankers who worked for Wells Fargo in California between mid-March of 2017 and the first day in August of 2017. Bloomberg reached out to the bank for comment, but representatives from the bank did not immediately respond to the request.

The news comes weeks after the Office of the Comptroller of the Currency (OCC) and the Bureau of Consumer Financial Protection Bureau (CFPB) announced a settlement with Wells Fargo. The CFPB assessed a $1 billion penalty against the bank, but the bureau credited the $500 million penalty collected by the OCC against the fine, the bureau said in a statement.

“I am especially pleased that we were able to work closely and effectively with our colleagues at the OCC, and I appreciate the key role they played in the negotiations,” said Mick Mulvaney, acting director of the CFPB, in a statement. “As to the terms of the settlement: We have said all along that we will enforce the law. That is what we did here.”

The bureau found that the bank violated the Consumer Financial Protection Act (CFPA) through the way it ran an insurance program related to its auto loans and how it charged certain borrowers for mortgage interest rate-lock extensions. Beyond the penalty, the bureau said that the bank will need to take steps to remediate harmed consumers and undertake activities related to risk and compliance management.

——————————–

Latest Insights: 

Our data and analytics team has developed a number of creative methodologies and frameworks that measure and benchmark the innovation that’s reshaping the payments and commerce ecosystem. Check out our April 2019 Unattended Retail Report. 

TRENDING RIGHT NOW

To Top