Judge may reject parts of Wells Fargo account abuse settlement
A federal judge signaled that he may reject parts of Wells Fargo (NYSE:WFC) & Co’s proposed $142 million settlement with customers for whom it opened millions of unauthorized accounts.
The accord would resolve claims that Wells Fargo employees opened as many as 3.5 million bogus accounts since 2002 to meet unrealistic sales goals, driving up costs for customers and often hurting their credit scores.
It followed a national scandal that erupted last September after the third-largest U.S. bank agreed to pay $185 million in penalties to settle related charges by various authorities.
Wells Fargo spokesman Jim Seitz on Wednesday said the San Francisco-based bank is preparing a response, and considers the settlement “an important step in our journey to make things right for our customers and rebuild trust.”
Chhabria says he was “strongly incline” to reject a provision for an injunction barring customers from pursuing other claims against the bank, and asks whether this would “require the court to reject the settlement.”