Wells Fargo will fork over more than $3.6 million to the Consumer Financial Protection Bureau to settle claims over what the regulator called illegal student loan servicing practices, according to a release from the CFPB Monday.
In addition to the $3.6 million civil penalty, the bank will pay $410,000 in restitution to consumers. It will also be required to improve practices involving billing and processing of student loan payments.
The CFPB said Wells Fargo's student lending division violated federal consumer protection laws by processing borrower payments to collect higher fees, providing incorrect information on the value of partial payments and charging illegal late fees, among other practices.
“Wells Fargo hit borrowers with illegal fees and deprived others of critical information needed to effectively manage their student loan accounts,” said the bureau's director, Richard Cordray, in a statement. “Consumers should be able to rely on their servicer to process and credit payments correctly and to provide accurate and timely information, and we will continue our work to improve the student loan servicing market.”
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