Wells Fargo Hoping to Settle Claims Out of Court
It has been just a few months since Wells Fargo was fined $185 million for opening nearly two million fake accounts without customers’ permission.
Since then, the financial institution has faced a number of lawsuits and sanctions from several states. The company is hoping to resolve many of these legal disputes in arbitration instead of taking them to court.
Bloomberg has reported that Wells Fargo has requested that federal lawsuits filed in Salt Lake City by 80 customers be thrown out. The plaintiffs are hoping to recover at least $5 million in damages. Three of the customers involved in the lawsuit filed before Wells Fargo paid the $185 million settlement to the Consumer Financial Protection Bureau, the Office of the Comptroller of the Currency (OCC) and the City and County of Los Angeles.
In another class-action suit in Northern California, a judge has ruled that arbitration agreements can be enforced, which means Wells Fargo can force customers to arbitrate their claims instead of meeting them in court.
In the aftermath of the scandal, the bank has fired 5,300 employees, though some of them claim to have been wrongly terminated. Last month, Chief Executive John Stumpf resigned as chairman and CEO of the bank. Currently, President and Chief Operating Officer Timothy J. Sloan has filled in for Stumpf. During his years at Wells Fargo, Stumpf earned $120 million.
The Office of the Comptroller of Currency (OCC) has said that Wells Fargo will need to seek approval before making a number of business decisions and will face increased restrictions and oversight. For example, going forward, the bank can no longer give departing executives “golden parachute” payments, and must ask the OCC permission before hiring or firing senior executives, changing its board of directors or changing its business plans.