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July 20, 2011

Federal Reserve slaps Wells Fargo with puny $85 million penalty

  • $85 millionpaid by Wells Fargo for its role in the subprime mortgage fiasco; the penalty was issued by the Federal Reserve
  • $25 billion received by Wells Fargo from the Troubled Assets Relief Program, colloquially known as the bailout source

» This is both the largest consumer protection fine ever levied by the Fed and the first time the institution has punished a bank for nudging customers into subprime loans. There’s more to come, too; in addition to the fine, the order also “requires that Wells Fargo compensate affected borrowers,” although it’s unclear how this will work. It’s better than nothing, but $85 million just seems a bit low; as a point of comparison, the bank made $2.5 billion in the first three months of 2010 alone.

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23:20 // 2 years ago