Wells Fargo has agreed to pay $110 million to settle a class-action lawsuit over up to 2 million accounts its employees opened for customers without getting their permission, the bank announced Tuesday.
It's the first private settlement that Wells has reached since the company paid $185 million to federal and California authorities late last year. Authorities said bank employees, driven by high-pressure sales tactics, opened the bank and credit card accounts without customer authorization.
Wells also disclosed Tuesday that a federal regulator had downgraded its rating under a law designed to help monitor and promote banking practices to low-income and minority communities. The Office of the Comptroller of the Currency cited the sales practices as one reason for the downgrade. The move means restrictions on Wells' business, including opening more branches or making acquisitions.
The settlement will include customers who had accounts opened without their permission, or were signed up for a product they did not agree to, going back to Jan. 1, 2009. 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.