Wells Fargo & Co. may have to cough up more than $142 million to settle a bevvy of class-action lawsuits in connection with its unauthorized-accounts scandal.
A federal judge in San Francisco said late Wednesday that he would approve a settlement deal reached by the bank and plaintiffs' attorneys but only if they agree to several conditions, including a guarantee that all customers will be fully compensated for their losses.
The two sides had previously agreed that the bank would pay $142 million to compensate customers for fees and other damages related to millions of unauthorized checking, savings and credit card accounts.
But at a hearing last week, U.S. District Judge Vince Chhabria had said the proposed sum, while potentially more than enough, could fall short and leave customers in the lurch.
"If Wells Fargo wants to make things right, what about a full compensation guarantee?" Chhabria asked Wells Fargo's attorneys during the hearing.
In a filing late Wednesday, Chhabria laid out 11 conditions, including the guarantee, and gave the bank and plaintiffs' attorneys two weeks to come back with an amended deal.
He also wants the settlement to allow potential victims of the bank's practices to have more time to request payouts and for him to have the authority to appoint a monitor for the settlement.
David Fry, an attorney for Wells Fargo, had argued at last week's hearing that a compensation guarantee could force the bank to pay customers who were never harmed by its practices. It's not clear, though, whether Chhabria's demand for a guarantee could push the bank to walk away from the deal.
Wells Fargo spokesman Ancel Martinez said the bank and its attorneys "are reviewing the court order, and working with the plaintiffs' attorneys to prepare a revised settlement agreement."
