Wells Fargo has been quietly working on a proposed class-action settlement for customers affected by its scandal involving potentially unauthorized accounts.
The move would essentially represent a waiver of Wells Fargo’s forced-arbitration policies, which have created difficulties for customers seeking to sue the bank over accounts opened without their permission. Fine print in the San Francisco-based bank’s account agreements have required customer disputes to be handled instead in arbitration, outside the court system.
Timing and terms of the settlement are unclear, as the accord still requires court approvals. A court meeting on the matter is set for Nov. 8 in California federal court, according to documents.
Wells Fargo has said little publicly about the settlement. Executive David Galasso mentioned the deal earlier this month while testifying before elected officials in California during a hearing on the scandal, according to a Los Angeles Times story.
“We are committed to making things right for customers who may have been impacted and are working hard to rebuild trust in our company,” a Wells Fargo spokesman said in a statement, declining to comment further.
Last month, Wells Fargo entered into a $185 million accord with regulators to resolve claims employees opened more than two million accounts that may not have been authorized by customers. The bank has said as many as 60,000 accounts in North Carolina and South Carolina may have been opened without customer consent.
The latest settlement stems from a class-action lawsuit filed in May 2015 by a Wells Fargo customer in California, Shahriar Jabbari, who claimed the bank opened seven accounts he did not authorize. Wells Fargo in September 2015 convinced a federal judge that the issue should be resolved in arbitration.
While that decision was being appealed, settlement discussions with Wells Fargo began, according to the website for law firm Keller Rohrback, which represents Jabbari. A settlement was struck in early September.
An attorney for Keller Rohrback could not be reached for comment.
Settlement details will become public when the parties file requests for approval in federal court, according to firm’s website.