February 18, 2026, 2:30 PM ET
Wells Fargo has reached a settlement of $56.85 million in a class action lawsuit, which claims that some customers’ credit scores were negatively impacted during the COVID-19 pandemic.
As reported by Top Class Action, the bank did not concede to any wrongdoing but chose to settle after being accused of violating the Fair Credit Reporting Act by misreporting mortgage forbearances.
The lawsuit contends that during the pandemic’s early days, Wells Fargo granted mortgage forbearance to borrowers facing financial difficulties. However, it also claims the bank reported incorrect information to credit bureaus, which may have harmed consumers’ credit scores, thus breaching the CARES Act.
A judge in San Diego is slated to decide on April 17 whether to approve this settlement, allowing impacted customers to receive payments from the fund established for this purpose. For details on eligibility and potential compensation, you can check FAQ resources related to the case.
Wells Fargo has been contacted regarding the lawsuit.
Who qualifies for the Wells Fargo settlement?
According to the settlement site, eligibility is limited to individuals who currently own or have owned property with Wells Fargo mortgages in California.
To qualify, individuals must have received CARES Act forbearance after March 27, 2020. Their accounts should have been reported as “current” to a consumer reporting agency, with statuses like “pending.”
What is the CARES Act?
In March 2020, Congress passed the CARES Act to provide financial help to those affected economically by the pandemic.
This law mandates that lenders, including Wells Fargo, report accounts in forbearance due to pandemic-related hardships as “current,” ensuring borrowers’ credit scores remain unaffected.
The complaint states that Wells Fargo allegedly failed to adhere to this law by inaccurately reporting forbearance statuses to credit bureaus during the pandemic.
What is the deadline to participate in the settlement?
Eligible individuals do not need to take any action to receive payments from the settlement fund if approved. Payments will be automatically distributed after the final hearing.
If eligible consumers choose not to accept these payments, they can file objections. Any objections must be submitted in writing to the California Superior Court in San Diego by the March 25, 2026 deadline.
Those wishing to speak at the final court hearing need to file a written Notice of Intent to Appear, which also must meet the opposition’s deadline.
What is the total settlement amount?
The total amount Wells Fargo has agreed to pay is $56.85 million.
The court is expected to make a decision about the settlement’s approval at the final hearing on April 17.
