Wells Fargo to pay $110 million to settle fake account suit

Wells Fargo has agreed to pay $110 million to settle a class-action lawsuit over up to 2 million accounts that its employees opened for customers without getting their permission, the bank announced Tuesday.

Authorities said bank employees, driven by high-pressure sales tactics, opened the bank and credit card accounts without customer authorization.

Wells Fargo says it believes this settlement, which is subject to court approval, will resolve the 11 other pending class-action lawsuits filed against it over the accounts.

“We believe this is an outstanding result obtained for the benefit of a proposed nationwide class, notwithstanding Wells Fargo’s effort to block the class action with an arbitration clause,” said Derek Loeser, a partner with Keller Rohrback, one of the firms that filed a class-action suit against the bank.

In response to the scandal, Wells Fargo has changed its sales practices, ousted other executives and called tens of millions of customers to check on whether they truly opened the accounts in question.

The downgrade Tuesday from the Office of the Comptroller of the Currency, the nation’s supervisor for all large national banks, moved Wells Fargo to a “needs to improve” standing from its previous “outstanding” under the Community Reinvestment Act.

“These findings reflect an extensive and pervasive pattern and practice of discriminatory and illegal credit practices across multiple lines of business within the bank, resulting in significant harm to large numbers of consumers,” the regulator said.