The Settlement provides cash payments and changes to Wells Fargo’s lending policies. First, Wells Fargo has agreed to change its lending policies so that DACA recipients are eligible for student loans, unsecured credit cards, unsecured personal loans, secured and unsecured small business loans, and home mortgages on the same terms and conditions as those loans and credit are offered to U.S. citizens and permanent residents 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 in the relevant time periods for the types of loans and credit described above that are contained in Wells Fargo’s credit application databases.
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 $100 for each eligible credit denial, for a maximum Settlement Fund of $500,000 and a minimum Settlement Fund of $50,000 for the Nationwide Class. In other words, for Nationwide Class Members, the payment amount per claim will start at $100 and will decrease if the number of claims exceeds 5,000. For example, if individuals submit 6,000 claims, the payment amount per claim will be $83.33 (i.e., the capped amount of $500,000 divided by 6,000).
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 between January 30, 2015 and August 21, 2020. The settlement will be funded based on how many claims are submitted via Verified Claim Forms, as follows:
- For the first 2,000 Verified Claimants from the California Class, Wells Fargo will add $2,500 per claim to the fund up to $5,000,000.
- For the next 3,000 Verified Claimants from the California Class, Wells Fargo will add $2,000 per claim to the fund up to $6,000,000.
- For the next 2,000 Verified Claimants from the California Class, Wells Fargo will add $800 per claim to the fund up to $1,600,000.
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 4,000 claims, the cash payment for each claim will be $2,250 (i.e., (2,000 x $2,500) plus (2,000 x $2,000), all divided by 4,000). If individuals submit 7,000 claims, the cash payment for each claim will be $1,800 (i.e., (2,000 x $2,500) plus (3,000 x $2,000) plus (2,000 x $800), all divided by 7,000).
Settlement Floor and Ceiling and Cy Pres: The maximum amount in the Settlement Funds for both classes is $12.6 million. The minimum Settlement Funds is $4.75 million, regardless of the number of claimants. If the total amount of cash payments does not reach $4.75 million, the difference in the total amount of cash payments and $4.75 million will be split evenly and distributed to TheDream.US and UnidosUS, two nonprofits that support and advocate for DACA recipients’ civic engagement, civil rights and immigration, education, workforce and the economy, health, and housing.
Attorneys’ Fees and Costs, Service Awards, and Settlement Administration: Wells Fargo has also agreed to pay an additional amount of up to $5,000,000 to cover Class Counsel’s attorneys’ fees and costs, $25,000 each in service awards to the six named Plaintiffs (to $150,000 in total), and $450,000 to cover the cost of administering the settlement.