Wells Fargo & Co. (NYSE: WFC) shares were up slightly on Friday despite the megabank announcing that it would make a massive payment to resolve civil claims that it had created phony accounts and other customer abuses.
Specifically, Wells Fargo reached an agreement with attorneys general in all 50 states and the District of Columbia regarding previously disclosed retail sales practices, auto collateral protection insurance and Guaranteed Asset/Auto Protection, and mortgage interest rate lock matters.
Note that the agreement covers retail sales practices and auto and mortgage issues for which the company already is remediating customers. Wells Fargo said in the release that it has been engaged with its federal regulators to address these issues.
Under the terms of the agreement, Wells Fargo will:
- Pay a total of $575 million to resolve civil claims that the state Attorneys General otherwise might bring arising out of or related to the covered conduct prior to the effective date of the agreement.
- Maintain designated teams to review and respond to customer inquiries on the covered issues.
- Create and maintain a website that describes the issues and Wells Fargo’s existing remediation efforts, and identifies contact information for consumers to utilize if they have any questions or concerns about the covered issues.
Tim Sloan, CEO and president of Wells Fargo, added:
This agreement underscores our serious commitment to making things right in regard to past issues as we work to build a better bank.
Shares of Wells Fargo were last seen up about 1.5% at $46.21, in a 52-week range of $43.02 to $66.31. The consensus analyst price target is $61.26.