--- description: Wells Fargo will pay a $1.2 billion penalty to settle claims that the bank illegally claimed that loans were eligible for insurance title: Wells Fargo: Justice Department Loan Suit Settled image: https://static.time.com/v3/assets/bltea6093859af6183b/blt24401ec25e89ee6b/69888e642dce0187269e8922/wells-fargo.jpg?branch=production&width=3840&quality=75&auto=webp&crop=16:9 ---  * [Business](/section/business/) ## Business Update your preferences in [Account Settings](/account/preferences/) Close * [Regulation](/tag/regulation/) ## Regulation Update your preferences in [Account Settings](/account/preferences/) Close # Wells Fargo to Pay $1.2 Billion to Settle Lending Practices Claims  by [Justin Worland](/author/justin-worland/)  ## Justin Worland Update your preferences in [Account Settings](/account/preferences/) Close Senior Correspondent Updated: Dec 15, 2023 3:42 AM CUTPublished: Apr 8, 2016 9:41 PM CUT  A pedestrian walks past a Wells Fargo & Co. bank branch in Washington on Jan. 7, 2016. A pedestrian walks past a Wells Fargo & Co. bank branch in Washington on Jan. 7, 2016.Andrew Harrer/Bloomberg—Getty Images  by [Justin Worland](/author/justin-worland/)  ## Justin Worland Update your preferences in [Account Settings](/account/preferences/) Close Senior Correspondent Updated: Dec 15, 2023 3:42 AM CUTPublished: Apr 8, 2016 9:41 PM CUT Wells Fargo Bank will pay a [$1.2 billion penalty](https://www.justice.gov/opa/pr/wells-fargo-bank-agrees-pay-12-billion-improper-mortgage-lending-practices "undefined") to settle a claim that the bank illegally claimed certain loans were eligible for a federal insurance program, the Justice Department said Friday. The Justice Department argued that Wells Fargo had lent recklessly and relied on the federal government to pick up the tab when lessees defaulted. “The $1.2 billion settlement with Wells Fargo is the largest recovery for loan origination violations,” said Housing and Urban Development Secretary Julián Castro. “This monetary figure can never truly make up for the countless families that lost homes as a result of poor lending practices.” “Today’s court filing details a previously announced agreement in principle that resolves not only the pending lawsuit filed by the U.S. Attorney for the Southern District of New York, but also a number of other potential claims going back as far as 15 years in some cases,” said Franklin Codel, president of Wells Fargo Home Lending. “It allows us to put the legal process behind us, and to focus our resources and energy on what we do best—serving the needs of the nation’s homeowners.” ```json [{"@context":"https://schema.org","@type":"NewsArticle","@id":"https://time.com/4287458/wells-fargo-lending-practices-suit/","mainEntityOfPage":{"@type":"WebPage","@id":"https://time.com/4287458/wells-fargo-lending-practices-suit/"},"headline":"Wells Fargo to Pay $1.2 Billion to Settle Lending Practices Claims","datePublished":"2016-04-08T21:41:59.000Z","dateModified":"2023-12-15T03:42:03.000Z","description":"The Justice Department argued that Wells Fargo had lent recklessly","url":"https://time.com/4287458/wells-fargo-lending-practices-suit/","keywords":["Regulation"],"thumbnailUrl":"https://static.time.com/v3/assets/bltea6093859af6183b/blt24401ec25e89ee6b/69888e642dce0187269e8922/wells-fargo.jpg?branch=production&width=1200&quality=75&auto=webp&crop=1200:675&height=675","author":[{"@type":"Person","name":"Justin Worland","jobTitle":"Senior Correspondent","url":"https://time.com/author/justin-worland/"}],"articleSection":"Business","image":[{"@type":"ImageObject","url":"https://static.time.com/v3/assets/bltea6093859af6183b/blt24401ec25e89ee6b/69888e642dce0187269e8922/wells-fargo.jpg?branch=production&width=1200&quality=75&auto=webp&crop=1200:675&height=675","width":1200,"height":675,"headline":"Wells Fargo Bank DOJ settlement","caption":"Wells Fargo Bank DOJ settlement","creditText":"Andrew Harrer/Bloomberg—Getty Images","representativeOfPage":true}],"publisher":{"@type":"Organization","name":"Time","url":"https://time.com/","logo":{"@type":"ImageObject","url":"https://time.com/images/logo.png","width":528,"height":156},"foundingDate":"March 3, 1923","sameAs":["https://www.facebook.com/time","https://www.instagram.com/time/?hl=en","https://twitter.com/time","https://www.pinterest.com/timemagazine"]}},{"@context":"https://schema.org","@type":"BreadcrumbList","itemListElement":[{"@type":"ListItem","position":1,"item":{"@id":"/section/business/","name":"Business"}},{"@type":"ListItem","position":2,"item":{"@id":"/tag/regulation/","name":"Regulation"}},{"@type":"ListItem","position":3,"item":{"@id":"https://time.com/4287458/wells-fargo-lending-practices-suit/","name":"Wells Fargo to Pay $1.2 Billion to Settle Lending Practices Claims"}}]}] ```