The Consumer Financial Protection Bureau is hitting Wells Fargo with a $3.6 million fee for propagating what the bureau says were illegal student loan servicing practices “that increased costs and unfairly penalized certain student loan borrowers.”
The bureau claims Wells Fargo failed to provide important payment information to consumers, charged illegal fees, and failed to update incorrect credit info. In addition to paying the CFPB $3.6 million, the bank will be required to pay out over $400,000 to compensate borrowers for illegal late fees, and “improve its consumer billing and student loan payment processing practices.” It must also remove any negative student loan information that it inaccurately shared with consumer reporting agencies.
According to the CFPB, Wells Fargo’s Educational Financial Services division, which is in charge of the bank’s private student loan servicing, currently has 1.3 million consumers in 50 states. The bureau claims that thousands of borrowers were negatively impacted by Wells Fargo’s practices.
Wells Fargo isn’t the first bank to get dinged for shady student loan practices. Discover was ordered to pay $18.5 million in 2015 to consumers and the CFPB. Earlier this summer, MONEY reported on the Education Department’s plans to ensure consistent customer treatment across banks, as well as create a streamlined “process for accessing information about and repaying loans.”
If you have student loans, here are seven things you can do to avoid those loan headaches.