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Wells Fargo Facing Discrimination Charges for Mortgage Loans

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the staff of the Ridgewood blog

Ridgewood NJ, Wells Fargo, once the largest mortgage lender in America, is facing accusations of discrimination linked to the industry’s widespread practice of providing mortgage loan discounts to specific borrowers, as reported by CNBC.

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Ridgewood Village Council Gives Residents Zero Information on 510 West Saddle River Road Land Grab

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the staff of the Ridgewood blog

Ridgewood NJ, speaking about bad planning , will wonders never cease, the Village Council plans to  purchase a property at 510 West Saddle River Road to build a parking lot and bathrooms on top of the new new Schedler plan which involves clear cutting 8 acres of trees and laying a turf field to create a  sports complex on Route 17.

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New Jersey Bureau of Securities Revokes Registrations of Wells Fargo Financial Advisor Accused of Stealing from Elderly Clients

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the staff of the Ridgewood blog

Elizabeth NJ , Acting Attorney General Matthew J. Platkin and the Division of Consumer Affairs today announced that the New Jersey Bureau of Securities has revoked the registration of a former Wells Fargo agent and investment adviser representative for violating New Jersey’s securities laws. The Bureau found that Mario E. Rivero, Jr. made misrepresentations to at least four of his senior Wells Fargo customers to convince them to turn over at least $529,780 in cashier’s checks, over which he ultimately gained control for personal uses.

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Wells Fargo Consumer Redress Review Program

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the staff of the Ridgewood blog

Ridgewood NJ, Attorney General Gurbir S. Grewal announced today that Wells Fargo has begun a consumer redress review program through which customers who have not already been made whole through other remediation programs can seek to have their inquiry or complaint reviewed by a Wells Fargo escalation team for possible relief.

The consumer redress review program was a key component of Wells Fargo’s overall $535 million settlement with New Jersey, 49 other states and the District of Columbia in 2018 to resolve claims that the bank violated state consumer protection laws through multiple unlawful actions.

Those actions included (1) opening millions of unauthorized accounts and enrolling customers into online banking services without their knowledge or consent, (2) improperly referring customers for enrollment in third-party renters and life insurance policies, (3) improperly charging auto loan customers for force-placed and unnecessary collateral protection insurance, (4) failing to ensure that customers received refunds of unearned premiums on certain optional auto finance guaranteed asset/auto protection (GAP) products, and (5) incorrectly charging customers for mortgage rate lock extension fees.

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Wells Fargo Bank Resolves Allegations the Company Engaged in a Variety of Sales, Lending, and other Improper Business Practices Reaches $575 Million Agreement

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the staff of the Ridgewood blog

TRENTON NJ, Attorney General Gurbir S. Grewal announced today that New Jersey is among the states joining a settlement agreement with Wells Fargo Bank that resolves allegations the company engaged in a variety of sales, lending, and other improper business practices for more than a decade.

Under the settlement terms New Jersey will receive nearly $17 million. Wells Fargo’s total payment under the agreement is approximately $575 million, including distributions to other states, attorneys’ fees, and other payments. 

The alleged consumer protection violations in Wells Fargo’s sales, auto-lending, and mortgage-lending practices include (1) opening millions of unauthorized accounts and enrolling customers into online banking services without their knowledge or consent, (2) improperly referring customers for enrollment in third-party renters and life insurance policies, (3) improperly charging auto loan customers for force-placed and unnecessary collateral protection insurance, (4) failing to ensure that customers received refunds of unearned premiums on certain optional auto finance products, and (5) incorrectly charging customers for mortgage rate-lock extension fees.

Through this settlement with 50 states and the District of Columbia, Wells Fargo will also create a consumer redress review program through which consumers who have not been made whole through other remediation programs already in place can seek to have their inquiry or complaint reviewed by a bank escalation team for possible relief. To date, this settlement represents the most significant engagement involving a national bank by state attorneys general acting without a federal law enforcement partner. 

Wells Fargo has identified more than 3.5 million accounts where customer accounts were opened, funds were transferred, credit card applications were filed, and debit cards were issued without the customers’ knowledge or consent. The bank has also identified 528,000 online bill pay enrollments nationwide that may have resulted from improper sales practices at the bank. 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.

“Wells Fargo’s corporate culture led to repeated breaches of its customers’ trust,” said Attorney General Grewal. “This settlement should send a message to all financial institutions that they need to take steps to avoid similar consumer protection violations, because we stand ready to hold the financial industry accountable.”

The states allege that Wells Fargo’s senior management exerted significant pressure on middle management and line employees to generate sales, through the establishment of unrealistic sales goals and an incentive compensation program. These sales goals became increasingly hard to achieve over time, the states allege, and employees who failed to meet them faced potential termination and unfavorable reviews. As a result, employees routinely enrolled customers in checking and savings accounts, credit cards, debit cards, unsecured lines of credit and online bill pay services without their knowledge or consent.

The states also contend that Wells Fargo employees wrongly charged more than two million auto financing customers premiums, interest, and fees for forced-place collateral protection insurance, even though this insurance duplicated coverage the customers already had in place. As a result, Wells Fargo has agreed to provide remediation of more than $385 million to approximately 850,000 auto finance customers. The remediation will include payments to over 51,000 customers whose cars were repossessed.

According to the states, Wells Fargo also failed to provide proper refunds to auto finance customers who had purchased Guaranteed Asset Protection insurance policies, designed to address situations in which a car buyer/borrower ends up owing more than a vehicle’s value. As a result, Wells Fargo has agreed to provide refunds totaling more than $37 million to certain auto finance customers. 

Finally, the states alleged that Wells Fargo improperly charged residential mortgage consumers for rate lock extension fees. With rate lock extension, borrowers could “lock in” an ostensibly favorable interest rate, for a fee, even if their loans did not close within the defined rate lock period. 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. The bank has identified and contacted affected consumers and has refunded or agreed to refund over $100 million of such fees.

Wells Fargo has previously entered into consent orders with federal authorities – including the Office of the Comptroller for the Currency (OCC) and the Consumer Finance Protection Bureau (CFPB) – related to its alleged conduct. Wells Fargo has committed to or already provided restitution to consumers in excess of $600 million through its agreements with the OCC and CFPB as well as through settlement of a related consumer class-action lawsuit, and will pay over $1 billion in civil penalties to the federal government. Additionally, under an order from the Federal Reserve, the bank is required to strengthen its corporate governance and controls, and is currently restricted from exceeding its total asset size.

As part of its settlement with the states, Wells Fargo has agreed to implement within 60 days a program through which consumers who believe they were affected by the bank’s conduct, but fell outside the prior restitution programs, can contact Wells Fargo to be reviewed for potential redress. Wells Fargo will create and maintain a website for consumers to use to access the program and will provide periodic reports to the states about the program’s progress.

More information on the redress review program, including Wells Fargo escalation phone numbers and the website address 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