Wells Fargo Hit With $85M Subprime Steering Penalty

Law360, New York (July 20, 2011, 7:18 PM EDT) -- Wells Fargo & Co. on Wednesday agreed to pay the Federal Reserve Board $85 million to resolve claims that members of a shuttered subsidiary pushed customers into costlier subprime mortgages and falsified income information in mortgage applications.

The banking regulator alleged that between January 2004 and September 2008, Wells Fargo Financial Inc., a now-defunct unit of the San Francisco-based bank, pushed borrowers that were eligible for lower interest prime mortgages into subprime loans at higher interest rates. The Fed also alleged Wells Fargo Financial employees pumped...
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