Wells Settles B&C Lending Practices Suit

Wells Fargo Financial Inc., the consumer finance subsidiary of San Francisco-based Wells Fargo & Co., has announced the settlement of a class action lawsuit involving its nonprime mortgage lending practices in California.Under the proposed settlement with law firms Cotchett, Pitre & McCarthy, Burlingame, Calif., and Miner, Barnhill & Galland PC, Madison, Wis., the company said it pledges to continue for three years certain improvements it had already put into practice and to enact a default relief program for qualifying class members. The relief program earmarks $2.4 million to provide relief to qualifying class members whose loans have become more than 60 days delinquent, and up to $4.4 million for cash payments to class members who submit claims. Class members are certain California customers who entered into real-estate-secured loans with Wells Fargo Financial between Dec. 18, 1999, and Nov. 20, 2005. The Association of Community Organizations for Reform Now, a party to the suit, had alleged that the company failed to adequately disclose points and prepayment penalties and inaccurately reported the loan balances of some California customers to credit reporting agencies. The settlement is subject to approval by the San Francisco Superior Court. The company can be found online at http://www.wellsfargofinancial.com.