Wells Fargo Bank will pay a $1.2 billion penalty 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.”
More Must-Reads From TIME
- The 100 Most Influential People of 2024
- The Revolution of Yulia Navalnaya
- 6 Compliments That Land Every Time
- What's the Deal With the Bitcoin Halving?
- If You're Dating Right Now , You're Brave: Column
- The AI That Could Heal a Divided Internet
- Fallout Is a Brilliant Model for the Future of Video Game Adaptations
- Want Weekly Recs on What to Watch, Read, and More? Sign Up for Worth Your Time
Write to Justin Worland at justin.worland@time.com