The banking subsidiary of Wells Fargo & Co. has been penalized for issuing credit cards linked to equity on New York properties.
Around 1,300 New York borrowers reportedly had their homes put at risk through routine credit card purchases made on the Nowline Visa Platinum Credit Card  product.
Generating the accounts was Wells Fargo Financial Credit Services of New York Inc., while the card accounts were owned by Wells Fargo Bank, N.A.
The New York Department of Financial Services said Thursday that the violations were uncovered in an examination by the department.
The state and Wells Fargo Bank have reached a consent order, according to a statement Thursday.
The order requires Wells Fargo to pay a $2 million penalty.
In addition, $2 million in direct consumer restitution payments will be provided by Wells Fargo.
The order further requires that Wells Fargo cut the interest rates on the impacted loans by 200 basis points going forward.
Any liens held on New York properties tied to the Nowline must be released.
