Wells Fargo will pay $110 million to settle a class-action lawsuit over a fake-accounts scandal in which thousands of customers were signed up for services that they didn’t consent to. The bank announced the settlement Tuesday, saying customers who had accounts opened without their permission dating back to 2009 will receive compensation. The bank also said it would waive its right to use third-party arbitration, a move that would allow the bank to use a private mediator rather than a court in dealing with customers’ complaints. “This agreement is another step in our journey to make things right with customers,” Wells Fargo CEO Tim Sloan said in a statement published Tuesday.
The bank faces 11 other class-action suits in the scandal, though it said it believes this settlement will resolve those cases. The bank also announced Tuesday that it has been downgraded by the Office of the Comptroller of the Currency in light of the controversy, meaning it will face restrictions in opening new branches or making acquisitions. Derek Loeser, a lawyer with one of the firms that filed a class-action suit, said he was satisfied with the settlement. “We believe this is an outstanding result obtained for the benefit of a proposed nationwide class, notwithstanding Wells Fargo’s effort to block the class action with an arbitration clause,” Loeser was cited as saying by the Associated Press. The bank’s board is also conducting an investigation into the bank’s sales practices, with a report due out in April.