Wells Fargo Reaches Settlement with CFPB Over Alleged Illegal Student Loan Servicing Practices

Yesterday, the Consumer Financial Protection Bureau (CFPB) announced that it had agreed to a Consent Order with Wells Fargo Bank, N.A. (Wells Fargo) relating to Student Loan Servicing Practices.  The Consent Order was reached after the CPFB had brought an action against Wells for illegal private student loan servicing practices that increased costs and unfairly penalized certain student loan borrowers.

A copy of the Consent order can be found here.

The CFPB identified breakdowns throughout Wells Fargo’s servicing process including failing to provide important payment information to consumers, charging consumers illegal fees, and failing to update inaccurate credit report information. The Consent Order requires Wells Fargo to improve its consumer billing and student loan payment processing practices. The company must also provide $410,000 in relief to borrowers and pay a $3.6 million civil penalty to the CFPB.