Wells Fargo will pay $575 million to settle claims made by U.S. states that the bank created phony accounts and other customer abuses, according to a statement by the Iowa attorney general’s office.
Two years ago, Wells Fargo agreed to pay $190 million to settle federal government claims that the bank created phony customer accounts. The deal announced on Friday will settle similar claims made by attorneys general from all 50 states and the District of Columbia. The settlement was reported earlier by Reuters.
As of the end of the third quarter of 2018, Wells Fargo had set aside $400 million of the settlement amount and expects to set aside the remaining $175 million by the end of this year, the company said in a statement.
Friday’s settlement marks the most recent in a long list of penalties related to Wells Fargo’s sales scandal, which initially related to the bank opening millions of accounts in customers’ names without their permission. It has since touched on businesses ranging from mortgage banking to auto lending.
After reaching settlements with the Consumer Financial Protection Bureau, Office of the Comptroller of the Currency, the Los Angeles city attorney and the New York attorney general, Wells Fargo still faces probes by the U.S. Securities and Exchange Commission, the Department of Justice and the Department of Labor, according to its most recent securities filing.
