Tuesday, December 3, 2013

Wells Fargo Ordered to Appear on Contempt Charges Related to Payday Loan Scheme

By Michael Fuller, Portland Trial Attorney

UpdateWells Fargo Pays Over $35,000 to Settle Contempt Charges


On December 2, a federal judge in Portland ordered Wells Fargo to appear in court to show why it shouldn't be held in contempt for its collection efforts related to a payday loan scheme.

Last month, Oregon consumer Antonio Espinosa filed a 30 page motion alleging Wells Fargo failed to follow the bankruptcy rules when it permanently seized wages from his account.

See Prior Post: Wells Fargo Prosecuted for Contempt in Payday Loan Scheme

Wells Fargo's Payday Loan Scheme


Bank records on file with the court indicate Wells Fargo charged Espinosa over 75% APR through its payday loan scheme in 2013.

Espinosa claims his bank fees to Wells Fargo totaled nearly 50% of his net wages.


The bankruptcy judge set Wells Fargo's first appearance date on the contempt charge for January 7, 2014. Wells Fargo has yet to file a response.

Click here to read the court order.

Punitive Damages


In a separate lawsuit filed yesterday, Espinosa requested Wells Fargo pay actual and punitive damages for its alleged "willful" choices.

Espinosa's attorney has requested Wells Fargo publicly disclose the amount of profits it earned last year by seizing consumer bank funds through "set off." Read more about "set off" here.

Wells Fargo Never Sought Court Permission


Espinosa alleges that Wells Fargo illegally seized his wages from his checking account after he filed for bankruptcy protection.

Court records indicate Wells Fargo never sought permission from the court before permanently seizing Espinosa's wages.

[Portland Bankruptcy Court Case Number 13-32954-elp7; 13-03295-elp]