SAN FRANCISCO—A California federal judge has granted final approval to a $110-million shareholder derivative settlement involving Wells Fargo, resolving claims that the bank’s directors and executives failed to properly oversee discriminatory mortgage lending practices and allegedly conducted “fake” job interviews with diverse candidates to satisfy internal hiring policies, Bloomberg Law reported.
U.S. District Judge Trina Thompson said the agreement was fair and reasonable, citing the risks and complexity of continued litigation and praising what she described as “arm’s-length and informed negotiations.” The settlement requires Wells Fargo to establish a $100 million mortgage assistance fund aimed at supporting low- and moderate-income borrowers in more than 50 metropolitan areas, along with a separate $10 million payment to the company funded through directors-and-officers insurance coverage, Bloomberg Law said.
The derivative lawsuit accused Wells Fargo leadership of breaching fiduciary duties by failing to address alleged racial disparities in mortgage lending and by permitting hiring practices in which diverse candidates were interviewed for positions that had already effectively been filled. The allegations emerged amid broader scrutiny of the bank’s diversity and governance practices following earlier public reports concerning so-called “sham” interviews tied to internal diversity initiatives, Bloomberg Law explained.
Plaintiffs’ attorneys called the settlement historic, arguing the borrower assistance program could direct significant resources into communities disproportionately affected by lending barriers. The case adds to a long list of legal and regulatory challenges faced by Wells Fargo in recent years tied to consumer practices, governance failures and discrimination claims.