Wells Fargo Bank will pay $4 million to end allegations by the Consumer Financial Protection Bureau (CFPB) that it used illegal payment processing practices which increased costs to borrowers. The CFPB stated that thousands of student-loan borrowers had problems with their loans or got misinformation about their payment options because of breakdowns in Wells Fargo’s servicing process. The agency said the bank maximized late fees and if a customer paid paid less than the amount due the bank divided the payment across multiple loans in the account rather than for some of the loans.
Wells Fargo was also accused of charging late fees who made payments on the last day of their grace period or paid their monthly amouts through partial payments instead of one full payment.
Jeffrey Newman represents whistleblowers.