There are at least three ways a bank can misbehave. It can be downright bad, it can be sloppy, or it can be foolish. Wells Fargo’s $1 billion settlement of a class-action lawsuit, disclosed on Tuesday, mostly relates to the last kind. But the bank run by Charlie Scharf has been a good example of all three.

Wells Fargo (WFC) is paying disgruntled investors who say former executives misled them over its progress in freeing itself from a cap imposed by the Federal Reserve that keeps its assets below $2 trillion. Though weighty, the 10-figure settlement hardly represents a clean start. In January, Wells Fargo outlined 14 outstanding legal and regulatory skirmishes. Scharf’s bank has paid roughly $20 billion in “operating losses,” a euphemism that includes fines, settlements and penalties, since 2018.

For investors, the type of misstep that earns Wells Fargo each wrist-slap matters as well as the cost. Outright bad behavior is shocking, but fixable. Wells Fargo’s creation of millions of fake customer accounts, one of the main reasons the Fed imposed its asset cap, started that way. Likewise, Goldman Sachs employees’ involvement in Malaysia’s 1MDB bribery scandal. Where there’s individual blame, a bank can appease investors by purging bad actors and clawing back pay.

Foolishness is more problematic. Tuesday’s settled lawsuit paints a picture of unwise or selectively truthful, rather than malicious, executives. There, a change of tone helps. Scharf has been frank with investors since taking over in 2019, telling them there is no quick fix. The asset cap, which will only be lifted if Wells Fargo sufficiently appeases regulators’ concerns, will probably stick around until at least the end of this year.

Carelessness – like failing to keep staff off messaging apps, or running glitch-filled systems – might be the most corrosive kind of misbehavior. Wells Fargo took a $3.7 billion penalty from the Consumer Financial Protection Bureau in December for snafus like accidentally repossessing customers’ cars. The fake accounts scandal began as overt bad behavior but ran unchecked for years because of sloppiness. Cultures change slowly, and investors can’t fully gauge that change from the outside.

Scharf at least isn’t alone. Citigroup boss Jane Fraser is trying to rehabilitate a gaffe-prone lender that wired $500 million to the wrong people and was fined $400 million in 2020 for unspecified sloppy practices. Fraser’s answer is to slim Citi down – by, for example, selling its Mexican retail business – to leave a bank that’s easier to manage. Scharf, who runs a huge but straightforward U.S. lender, doesn’t have such easy options. His only path forward is just to keep scrubbing, and be honest about how joyless that process is.

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Wells Fargo agreed to pay $1 billion to settle a lawsuit claiming it gave false and misleading statements about its attempts to clean up after a string of missteps and scandals. The bank said, however, that it disagrees with the allegations in the class action. The plaintiffs had argued that former executives and board members, including former Chief Executives Timothy Sloan and Allen Parker and former Chair Elizabeth Duke, had misrepresented how far along the bank was in placating regulators. Wells Fargo has faced fines and other penalties for mis-steps including the creation of fake customer accounts, and illegally-assessed fees on auto and mortgage loans. Wells Fargo is forbidden from growing its assets above $2 trillion as a result of a consent order imposed by the Federal Reserve in 2018. Executives said in January that they expect the asset cap to remain in place until at least 2024.

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