By Alan Zibel
WASHINGTON-- Wells Fargo & Co. and J.P. Morgan Chase &
Co. on Thursday agreed to pay $35.7 million to settle federal and
state allegations they received compensation from a real-estate
firm in exchange for referrals of business.
The banks settled the allegations brought by the Consumer
Financial Protection Bureau and the Maryland attorney general's
office.
Under the settlement, filed in federal court for approval, Wells
Fargo agreed to pay a $24 million fine as well as $11.1 million in
compensation to consumers. J.P. Morgan agreed to pay a $600,000
fine as well as $300,000 to consumers.
The CFPB said the banks participated in a scheme with a
now-defunct Maryland-based title company, Genuine Title. Officials
said the title firm provided "kickbacks" to loan officers who
referred title business to them.
"These banks allowed their loan officers to focus on their own
illegal financial gain rather than on treating consumers fairly,"
CFPB Director Richard Cordray said in a written statement.
"We are fully committed to ensuring that our mortgage bankers
comply with all legal and regulatory requirements," a J.P. Morgan
spokesman said in a written statement. "These former employees
clearly violated our policies, procedures and training."
A Wells Fargo spokesman said the bank "fully cooperated with the
CFPB in this matter and have taken strong corrective action,
including terminating team members who were involved and enhancing
our procedures to provide greater oversight and monitoring of both
the process and our team members."
Write to Alan Zibel at alan.zibel@wsj.com
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