The Settlement provides cash payments and changes to Wells Fargo’s lending policies. First, Wells Fargo has agreed to change its policies so that DACA recipients are eligible for direct auto loans on the same terms and conditions as those loans are offered to U.S. citizens as long as there is an appropriate product. In other words, Wells Fargo will not consider whether an applicant has DACA in deciding whether to offer credit.
Second, Wells Fargo has agreed to make cash payments to Class Members who timely submit a Verified Claim Form. The number of cash payments will be based on each Class Member’s number of applications and denials of direct auto loans from July 16, 2017 through August 21, 2020 that are contained in Wells Fargo’s direct auto loan application database.
Nationwide Class Members: Wells Fargo has agreed to pay Nationwide Class Members (i.e., those outside California) who timely submit a Verified Claim Form up to $300 for each eligible credit denial, for a maximum Settlement Fund of $105,000 and a minimum Settlement Fund of $55,000 for the Nationwide Class. In other words, for Nationwide Class Members, the payment amount per claim will start at $300 and will decrease if the number of claims exceeds 350. For example, if individuals submit 400 claims, the payment amount per claim will be $262.50 (i.e., the capped amount of $105,000 divided by 400).
California Class Members: Wells Fargo has also agreed to pay California Class Members who timely submit a Verified Claim Form up to $2,500 for each denial of credit during the applicable time period. The settlement will be funded based on how many claims are submitted via Verified Claim Forms, as follows:
- For the first 110 claims from Verified Claimants from the California Class, Wells Fargo will add $2,500 per claim to the fund up to $275,000.
- For any remaining claims from Verified Claimants from the California Class, Wells Fargo will add $800 per claim to the fund up to $525,000.
In other words, for California Class Members, the payment amount per claim (for each denial of credit) will start at $2,500 for each claim and will decrease if the number of claims exceeds the total amounts above. For example, if individuals submit 200 claims, the cash payment for each claim will be $1,735 (i.e., (110 x $2,500) plus (90 x $800), all divided by 200). If individuals submit 600 claims, the cash payment for each claim will be $875 (i.e., the capped amount of $525,000 divided by 600).
Settlement Floor and Ceiling and Cy Pres: The maximum amount in the Settlement Funds for both classes is $630,000, and the minimum is $280,000, regardless of the number of claimants. If the total amount of cash payments does not reach $280,000, the difference in the total amount of cash payments and $280,000 will be split evenly and distributed to United We Dream, a nonprofit that supports and advocates for the DACA community and other immigrant youth, and Consumer Action, a consumer rights nonprofit.
Attorneys’ Fees and Costs, Service Award, and Settlement Administration: Wells Fargo has also agreed to pay an additional amount of up to $500,000 to cover Class Counsel’s attorneys’ fees and costs, a $5,000 service award to the Class Representative, and $50,000 to cover the cost of administering the settlement.