Wells Fargo allegedly repossessed an unknown number of vehicles from military members on active duty, drawing the attention of both the Department of Justice and Office of the Comptroller of Currency. Generally, repossessing a vehicle from an active duty soldier or sailor requires a court order, which the bank failed to get. It's not clear how many vehicles Wells Fargo allegedly repo'd, but the bank and government are already negotiating a potential settlement amount for affected borrowers, Bloomberg's sources said.
Wells Fargo isn't the first bank to make the mistake of going after active duty service members. Last year, Spanish bank Santander's American unit agreed to pay $9 million after being accused of illegally repossessing 1,112 vehicles from military owners, while Capital One paid $12 million in 2012 for the same charge, among other accusations. In fact, this isn't even the first time Wells Fargo ran afoul of the government. According to Bloomberg, the government accused the bank of not following military lending law in the past – in 2008, it was among five banks that agreed to pay $123 million to military members for improper foreclosures.
While it's possible Wells Fargo is in the wrong here, Bloomberg points out that lenders aren't necessarily aware of – or simply don't bother to check – a borrower's duty status, even though the Department of Defense offers banks a database to work from. According to the Government Accountability office, thousands of military members haven't received proper benefits because lenders fail to check their status.