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Wells Fargo settles subprime lending lawsuit
April 26, 2007 / 9:44 PM / 10 years ago

Wells Fargo settles subprime lending lawsuit

NEW YORK, April 26 (Reuters) - Wells Fargo & Co. (WFC.N) agreed to pay up to $6.8 million to settle a class-action lawsuit over its Wells Fargo Financial Inc. unit’s nonprime mortgage lending practices in California, the bank and lawyers for the plaintiffs said on Thursday.

Wells Fargo Financial will earmark $2.4 million for plaintiffs who are more than 60 days late on loan payments. Qualifying class members may receive up to $4.4 million of additional cash payments. The settlement requires court approval.

The Association of Community Organizations for Reform Now, or ACORN, had alleged in the lawsuit that Wells Fargo Financial failed to properly disclose points and prepayment penalties to borrowers, and inaccurately reported loan balances for some California customers to credit reporting agencies.

San Francisco-based Wells Fargo is the fifth-largest U.S. bank by assets, and one of the largest U.S. subprime lenders.

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