Wells Fargo ordered to pay $3.7 billion for 'illegal activity,' including mismanaging accounts

Federal regulators on Tuesday ordered Wells Fargo Bank to pay a $1.7 billion civil penalty and more than $2 billion in compensation to customers for what they say was "illegal activity affecting over 16 million consumer accounts."

The Consumer Financial Protection Bureau said Wells Fargo "repeatedly misapplied loan payments, wrongfully foreclosed on homes and illegally repossessed vehicles, incorrectly assessed fees and interest, charged surprise overdraft fees," among other things.

Thousands of customers lost their vehicles and homes due to the bank's activity over the course of several years, the federal regulators said. 

The $1.7 billion fine will go to the watchdog's Civil Penalty Fund to provide relief to victims.

Protection Bureau Director Rohit Chopra said Wells Fargo is a "repeat offender" and that the bank's "rinse-repeat cycle of violating the law has harmed millions of American families."

In 2016, the Protection Bureau levied a $100 million fine against Wells Fargo, which was the agency's largest fine ever at the time.