Wells Fargo pays M to settle LO comp lawsuit
Wells Fargo agreed to pay $95.7 million to more than 5,300 home mortgage consultants to resolve a pair of class-action legal claims that allege wage-and-hour violations in California, according to the settlement agreement in federal court.
The deal will provide $62.8 million to the class members, with the remainder going to plaintiffs attorneys.
The lawsuit, which combined two legal actions that were designated a class action, was filed on behalf of 5,377 loan officers and other mortgage staffers employed by the bank in California from 2013 and 2019. James Kang, the lead plaintiff, said Wells Fargo illegally clawed back compensation.
Kang, an LO who worked at Wells Fargo between 2000 and 2015, alleged that the bank paid advances on commissions at a rate of $12 per hour but then clawed it back. He also claimed Wells Fargo didn’t compensate mortgage professionals for non-sales work, clawed back vacation pay from commissions and did not pay overtime wages as required by laws.
Wells Fargo “failed to pay plaintiff and class members for all hours worked, including but not limited to, mandatory meetings, loan processing, training and coaching sessions, loan tracking, customer surveys, attending open houses, attending events and galas, and working on certain nights or weekends,” Kang’s complaint, filed in 2017, said.
The overall settlement also includes more than $25 million already paid by the bank in a related class action brought by Jacqueline Ibarra over state rest-break rules, Bloomberg Law reported.
Wells Fargo, the largest depository mortgage lender in America, has been plagued by scandals in recent years. The lender’s account fraud scandal, in which millions of fraudulent savings and checking accounts were opened on behalf of Wells Fargo clients without their consent, became widely known in 2016. A settlement with the U.S. Attorney General in December 2018 brought the total settlement cost to $3 billion.
In 2017, Wells Fargo agreed to pay customers who were overcharged mortgage fees $50 million, one of the many cases it settled related to pre-financial crisis policies. Wells Fargo also paid $13 million to settle a class-action lawsuit that accused the bank of “improperly” modifying the mortgages of borrowers who had declared bankruptcy.
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