SAN FRANCISCO--(BUSINESS WIRE)--Wells Fargo & Company (NYSE: WFC) announced today that the company has agreed to settle a lawsuit that claimed some Veterans Administration (VA) Interest Rate Reduction Refinance Loans (IRRRLs) originated by Wells Fargo should not have been eligible for VA guarantees. The suit, which was filed in 2006 and unsealed in 2011, sought compensation to the U.S. government over guarantee claims paid by the VA after those loans defaulted.
Under the agreement, Wells Fargo denies the allegations in the lawsuit but will pay $108 million to the U.S. government to resolve the claims. Wells Fargo has previously disclosed this legal action in its public filings, including in its most recent Quarterly Report on Form 10-Q, and the settlement costs have been previously accrued. The lawsuit had claimed that some VA IRRRLs should have been ineligible for VA guarantees because of certain fees charged to the borrowers when the loans were originated. In 2011, Wells Fargo settled a separate class action lawsuit by allowing all veterans who received a VA IRRRL from Wells Fargo between Jan. 20, 2004, and Oct. 7, 2010, to obtain compensation regardless of whether there were indications that the fees in question had been paid by the customer.
“More than six years ago, when questions about fees on Veterans Administration refinance loans were raised, we resolved those concerns by improving our internal controls and made compensation available to VA customers who closed a refinance before that time,” said Tim Sloan, Wells Fargo’s chief executive officer. “Settling this longstanding lawsuit allows us to put the matter behind us and continue to focus on serving customers and rebuilding trust with our stakeholders. We are committed to serving the financial health and well-being of veterans, and we will continue to honor that commitment now and in the future.”
Wells Fargo has been the nation’s largest VA lender over the past several years, having funded nearly 23 percent of all VA loans guaranteed since 2001. Wells Fargo offers a broad range of programs and resources to support the financial needs of veterans and has made a number of other commitments to address their broader needs. The company’s Military & Veteran Affairs Program was launched in 2012 to expand its outreach to members of the military and veterans who may be facing financial difficulties. In addition, Wells Fargo has:
- Donated more than 300 homes, valued at $50 million, to veterans in all 50 states.
- Hired more than 6,700 veterans and participated in more than 900 military job fairs since 2012.
- Launched Hands on Banking® for Military, a financial education program that has been accessed by more than 362,000 people since July 2013.
- Donated more than $25 million to military- and veteran-related nonprofits since 2012.
About Wells Fargo
Wells Fargo & Company (NYSE: WFC) is a diversified, community-based financial services company with $1.9 trillion in assets. Wells Fargo’s vision is to satisfy our customers’ financial needs and help them succeed financially. Founded in 1852 and headquartered in San Francisco, Wells Fargo provides banking, insurance, investments, mortgage, and consumer and commercial finance through more than 8,500 locations, 13,000 ATMs, the internet (wellsfargo.com) and mobile banking, and has offices in 42 countries and territories to support customers who conduct business in the global economy. With approximately 271,000 team members, Wells Fargo serves one in three households in the United States. Wells Fargo & Company was ranked No. 25 on Fortune’s 2017 rankings of America’s largest corporations. News, insights and perspectives from Wells Fargo are also available at Wells Fargo Stories.