Wells Fargo & Co., reeling from weeks of pummeling over fraudulent customer accounts, is now facing a Justice Department sanction over improperly repossessing cars owned by members of the military, according to two people with knowledge of the investigation.

Federal prosecutors and the bank’s regulator, the Office of the Comptroller of the Currency, plan to punish the San Francisco-based lender for alleged violations of the Servicemembers Civil Relief Act, the people said on the condition of anonymity.

A penalty of as much as $20 million is expected from the OCC, one person said.

That’s an unusually large fine for abuse of this law, which in most cases requires that firms obtain court orders before seizing vehicles from soldiers, sailors, airmen and Marines who are delinquent on their loans.

These enforcement actions against the bank follow a $185 million settlement in which employees of the firm opened more than 2 million accounts that customers may not have been aware of with the aim of meeting internal sales targets. The matter has sparked weeks of sharp criticism, congressional hearings and the forfeit of tens of millions in bonuses for top executives.

Wells Fargo’s stock declined 1.54 percent to $44.38 after Bloomberg News reported on the car-seizure sanctions Thursday – at the same time that Chairman and Chief Executive Officer John Stumpf answered questions in a House hearing on the accounts scandal.


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