GOVERNOR CUOMO ANNOUNCES WELLS FARGO TO PAY $4 MILLION re: Wells Fargo affiliate put borrowers' homes on the line for routine credit card purchases

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GOVERNOR CUOMO ANNOUNCES WELLS FARGO TO PAY $4 MILLION re: Wells Fargo affiliate put borrowers’ homes on the line for routine credit card purchases

GOVERNOR CUOMO ANNOUNCES WELLS FARGO TO PAY $4 MILLION re: Wells Fargo affiliate put borrowers’ homes on the line for routine credit card purchases

February 5, 2015

Contact: Matt Anderson, 212-709-1691

GOVERNOR CUOMO ANNOUNCES WELLS FARGO TO PAY $4 MILLION FOR VIOLATIONS ON CREDIT CARD ACCOUNTS AT FORMER AFFILIATE

More than 1,300 New Yorkers Expected to Receive Restitution Payments Averaging Approximately $1,600

Governor Andrew M. Cuomo today announced that Wells Fargo Bank will pay a $2 million penalty and provide approximately $2 million in direct consumer restitution payments for violations uncovered by a Department of Financial Services examination of the Bank’s former affiliate. Among other issues, the Department’s examination found that the Wells Fargo affiliate secured loans made through its Nowline Visa Platinum Credit Card  product with an interest in the borrower’s home – which is not permissible under New York law.

“New Yorkers deserve to trust who they do business with – and because of this aggressive investigation, individuals and families across the state will be justly compensated,” Governor Cuomo said. “My administration is committed to ensuring that banks and credit card institutions are treating consumers honestly and fairly, and we will continue to do just that.”

Benjamin M. Lawsky, Superintendent of Financial Services, said, “Our investigation uncovered that this Wells Fargo affiliate put borrowers’ homes on the line for routine credit card purchases – creating substantial and undue risks for consumers. This agreement will provide direct relief to New York consumers.”

The 1,300 New Yorkers expected to receive restitution payments are located in the following regions of the state:

Region Borrowers Receiving Restitution Payments
Capital Region

140

Central New York

90

Mid-Hudson

148

Long Island

270

Mohawk Valley

28

New York City

220

North Country

15

Finger Lakes

220

Southern Tier

58

Western New York

141

Borrowers will also receive future interest rate reductions of 2 percent on their balances going forward, which is estimated to provide additional relief of approximately $300,000 total. Wells Fargo will also release any security interest or liens they hold in New York homes related to the Nowline Visa Platinum Credit Card Account. 

A copy of the consent order between DFS and Wells Fargo is available here.

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