San Francisco-based Wells Fargo will pay a $2.09 billion civil penalty over allegations the company originated and sold residential mortgage loans that included misstated income information, the Justice Department said Wednesday.
The bank's actions contributed to the financial crisis, the agency said.
The bank allegedly knew that the loans "contained misstated income information and did not meet the quality that Wells Fargo represented," the department said.
"Investors, including federally insured financial institutions, suffered billions of dollars in losses from investing in residential mortgage-backed securities containing loans originated by Wells Fargo," the department added.
The settlement "holds Wells Fargo accountable for actions that contributed to the financial crisis," Acting Associate Attorney General Jesse Panuccio said in a statement. "It sends a strong message that the Department is committed to protecting the nation's economy and financial markets against fraud."