Wells Fargo has received preliminary court approval for a settlement fund of at least $142 million to cover 11 pending class actions that challenged the bank’s fake-accounts scandal.

U.S. District Judge Vince Chhabria granted initial approval of the settlement’s terms on Saturday. Chhabria had expressed concerns that an earlier version of the settlement could have shortchanged customers. Wells Fargo and lawyers for the customers subsequently revised the terms.

Under the latest version, consumers will be able to file claims for restitution from a $142 million settlement fund that Wells Fargo will establish. Wells Fargo said that it may later increase the amount of the settlement fund if $142 million does not cover all necessary customer reimbursements and other expenses.

Tim Sloan, president and chief executive officer of Wells Fargo.
Closer to the end?
The proposed settlement “further ensures each customer impacted by an improper retail sales practice has every opportunity for remediation,” Wells Fargo CEO Tim Sloan says. Bloomberg News

The plaintiffs had argued that by opening millions of fake accounts, Wells Fargo had damaged their credit ratings. Other individuals were also wrongly assessed fees for the fraudulent accounts.

The new settlement is expected to resolve the Jabbari case directly at issue before Chhabria, as well as 10 other pending class actions, Wells Fargo said in a news release Monday.

“This preliminary approval is a major milestone in our efforts to make things right for our customers,” CEO Tim Sloan said in the release. “It further ensures each customer impacted by an improper retail sales practice has every opportunity for remediation.”

The proposed settlement still requires final court approval. Wells Fargo did not provide an estimate on Monday for when it expects that decision to happen.

Wells Fargo has already paid $190 million in fines and restitution for the scandal and has fired 3,500 employees for their roles in the affair. But some lawmakers have called for additional actions against the bank; Sen. Elizabeth Warren, D-Mass., last month asked the Federal Reserve Board to remove 12 of the company’s 15 board members.

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