DOJ reviewing company’s compliance with military lending law
Bank’s vehicle repossessions also under regulatory scrutiny
Wells Fargo & Co. is facing a U.S. investigation into whether it improperly repossessed cars owned by members of the military, according to two people with knowledge of the probe.
In their review, the Justice Department and bank regulators are examining Wells Fargo’s compliance with the Servicemembers Civil Relief Act, which in most cases requires that firms obtain a court order before seizing vehicles from soldiers, sailors, airmen and Marines. The government and Wells Fargo have begun discussing how to compensate borrowers who might have been affected, said one of the people, who asked not to be named because the investigation isn’t public.
Shielding soldiers from financial stress has been a priority for lawmakers, and the Justice Department has recently stepped up enforcement actions against banks for taking assets illegally. Banco Santander SA’s U.S. unit agreed to pay $9 million last year over allegations that it improperly confiscated 1,112 vehicles from military members, the largest settlement ever obtained in a case involving repossessions of automobiles with delinquent loans.
Catherine Pulley, a spokeswoman for Wells Fargo, declined to comment. Spokesmen for the Justice Department and the Office of the Comptroller of the Currency, which regulates Wells Fargo’s banking unit, also declined to comment.