Wells Fargo & Co. has agreed to pay $110 million to settle a dozen class actions brought after the San Francisco bank disclosed that its employees had opened unauthorized accounts on behalf of about 2 million of its customers in order to meet sales quotas, The Recorder reported. “This agreement is another step in our journey to make things right with customers and rebuild trust,” said Wells Fargo CEO Tim Sloan. “We want to ensure that each customer impacted by our sales practices issue has every opportunity for remediation, and this agreement presents an additional option.” The settlement, announced yesterday, comes two days before the bank’s lawyers were set to argue before a federal judicial panel that the lawsuits should be coordinated before a single judge. Wells Fargo is represented by Munger, Tolles & Olson partners David Fry and Erin Cox. Read more.
In related news, Evidence of racially discriminatory lending practices, a scandal involving millions of accounts unauthorized by customers and other improper procedures have hit Wells Fargo bank with a lower regulatory rating, USA Today reported today. From 2004 to 2008, the San Francisco-based banking giant "engaged in a pattern or practice of discrimination" while serving African-American and Hispanic homebuyers, the U.S. Office of the Comptroller of the Currency recounted in a report the bank made public yesterday. Following a referral to the U.S. Department of Justice, Wells Fargo in 2012 agreed to a consent order that provided $125 million in compensation to minority buyers the bank had steered into subprime mortgages that had higher fees than the loans received by many white buyers. Combined with other terms, the settlement totaled at least $175 million in all. Read more.