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Wells Fargo CARES Act $56.85M Class Action Settlement
4 months agoUS
Wells Fargo has agreed to a $56.85 million settlement in a class action lawsuit alleging that the bank inaccurately reported CARES Act forbearances to credit agencies, potentially harming consumers' credit scores. This settlement aims to compensate California homeowners who were affected by these reporting errors.
Key Insights
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Wells Fargo will pay $56.85 million to settle claims of inaccurate credit reporting during the CARES Act forbearance period.
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The lawsuit alleges that Wells Fargo reported accounts with CARES Act forbearances as "in forbearance" instead of "current," impacting credit scores.
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The settlement benefits California mortgagors with mortgages on properties in California who received a CARES Act forbearance on or after March 27, 2020, and whose accounts were inaccurately reported.
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No claim form is required; eligible class members will automatically receive settlement benefits.
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Why this matters:: Inaccurate credit reporting can significantly impact consumers' ability to obtain loans and other financial products. This settlement provides compensation to those who may have been negatively affected by Wells Fargo's reporting practices.
In-Depth Analysis
The class action lawsuit, *Stoff v. Wells Fargo Bank N.A.*, Case No. 37-2020-00020808-CU-BT-CTL, alleged that Wells Fargo violated the Fair Credit Reporting Act (FCRA) by misreporting the status of mortgage accounts that were under CARES Act forbearance. The CARES Act provided homeowners with the right to request a forbearance on their mortgage payments during the COVID-19 pandemic. Plaintiffs argued that Wells Fargo's inaccurate reporting harmed their credit scores, making it more difficult and expensive to obtain loans.
Under the settlement terms, eligible class members will receive an equal share of the net settlement fund. The exact amount of individual payments will vary based on the number of participating class members and deductions for fees and expenses. Checks will be sent to the last known address of eligible class members after the final approval, expected in April 2026.
The deadline for exclusion and objection is March 25, 2026. Any remaining funds after the first round of payments may be used for a second distribution or donated to Credit Builders Alliance, a nonprofit organization.
FAQs
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Q: Who is eligible for the Wells Fargo CARES Act settlement?
California residents with a Wells Fargo mortgage on property in California who were current on their mortgage payments and received a CARES Act forbearance on or after March 27, 2020, and whose accounts were reported as “in forbearance” by Wells Fargo to a consumer reporting agency.
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Q: Do I need to file a claim?
No, class members who do not exclude themselves will automatically receive settlement benefits.
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Q: When is the deadline to exclude myself or object to the settlement?
March 25, 2026.
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Q: When is the final approval hearing?
April 17, 2026.
Key Takeaways
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If you are a California homeowner with a Wells Fargo mortgage who received a CARES Act forbearance, you may be eligible for compensation.
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No action is required to receive settlement benefits if you meet the eligibility criteria.
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Stay informed about the settlement by visiting the settlement website: CaresActLitigation.com&ref=yanuki.com.
Discussion
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