Economy

Wells Fargo Fined $85 Million By Fed Over Its Subprime Mortgage Lending Practices

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In its largest consumer protection enforcement action ever, the Federal Reserve today slapped an $85 million penalty on Wells Fargo, a bank scrutinized for pushing subprime loans on borrowers who qualified for lower prime lending rates. According to the official press release, Wells Fargo received the order both for its strong-arming of borrowers into subprime loans and for falsifying income information on mortgage forms. In addition to the civil fine, the Federal Reserve mandated that the mega-bank compensate those borrowers who were adversely affected, estimated to number “between 3,700 and possibly more than 10,000.” Wells Fargo received $25 billion in the taxpayer-funded bailout.

Sarah Bufkin