Wells Fargo has agreed to a $56.85 million class action settlement to address allegations that it violated the federal Fair Credit Reporting Act (FCRA) by inaccurately reporting CARES Act forbearances.
The Wells Fargo agreement extends benefits to California mortgagors holding a mortgage on property within California who had “current” accounts, received a CARES Act forbearance on or after March 27, 2020, and whose accounts were subsequently reported as “in forbearance” (or similar terminology) by Wells Fargo to a consumer reporting agency.
Plaintiffs in the class action lawsuit asserted that Wells Fargo breached the FCRA by classifying accounts under CARES Act forbearances as “in forbearance” instead of their “current” status. This alleged misreporting purportedly damaged consumers’ credit scores.
Wells Fargo operates as a bank offering a wide array of financial products and services, including mortgage loans.
While Wells Fargo has not admitted any wrongdoing, it has consented to pay $56.85 million to resolve the FCRA class action lawsuit.
Per the terms of the Wells Fargo settlement, qualifying class members are entitled to an equal portion of the net settlement fund. The precise payment amounts will fluctuate based on the total number of participating class members and the deductions made for fees and expenses. Class members who receive a settlement check will have 90 days to cash it.
Any remaining funds in the settlement after the initial distribution may be utilized for a secondary round of payments, should the residual amount be substantial enough to justify an additional distribution.
If the leftover funds are not sufficient to warrant a second round of payments, they will be donated to Credit Builders Alliance, a nonprofit organization dedicated to assisting low- and moderate-income consumers in building credit.
The deadline to opt out or object to the settlement is March 25, 2026.
The final approval hearing for the settlement is scheduled for April 17, 2026.
No claim form is necessary to receive benefits from the Wells Fargo CARES Act class action settlement. Class members who do not choose to exclude themselves will automatically receive settlement benefits.