By Ken Sweet The Associated Press
NEW YORK — Wells Fargo agreed Wednesday to pay a $2.1 billion fine to settle allegations it misrepresented the types of mortgages it sold to investors during the housing bubble that ultimately led to the 2008 financial crisis.
Wells Fargo is one of the last remaining big banks to settle charges related to its role in the subprime mortgage crisis.
The fine is unrelated to the recent scandals that have plagued Wells in the last three years, such as the opening of millions of fake accounts for customers without their authorization in order to meet unrealistic sales quotas, or the bundling of auto insurance policies on to auto loans when customers did not need them.
The Department of Justice said Wells Fargo sold at least 73,500 loans that had poor underwriting standards to investors. Half of those loans defaulted, resulting in billions of dollars in losses to investors.
“This settlement holds Wells Fargo accountable for actions that contributed to the financial crisis,” said Acting Associate Attorney General Jesse Panuccio in a statement.
In earlier settlements, Bank of America paid a $5 billion fine in 2014 for similar allegations, and Citigroup paid a $4 billion fine.