Wells Fargo Reaches Agreement with DOJ to Resolve Legacy RMBS Claims
AUG 6, 2018 - 6:35 am
Wells Fargo will pay $2.09 billion to resolve a previously disclosed investigation by the U.S. Department of Justice (DOJ) regarding claims related to certain 2005 to 2007 residential mortgage-backed securities activities.
“We are pleased to put behind us these legacy issues regarding claims related to residential mortgage-backed securities activities that occurred more than a decade ago,” said Wells Fargo CEO Tim Sloan. “Wells Fargo remains focused on our important role as one of the nation’s leading providers of mortgage financing and on our commitment to expanding sustainable homeownership opportunities for our customers.”
Under the terms of the agreement, Wells Fargo, without admitting liability, will pay a civil monetary penalty to resolve all civil claims available to the U.S. government under the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 for covered activities. The U.S. has also agreed to release Wells Fargo from any potential claims arising under the Program Fraud Civil Remedies Act (RICO), the Injunctions against Fraud Act and on certain other grounds. Importantly, there were no claims that individual customers were harmed as a result of the alleged conduct. The DOJ has previously reached agreements with a number of other banks to resolve similar RMBS issues.
The amount of the settlement was fully accrued as of June 30, 2018.
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