In the six months since Wells Fargo & Co. acknowledged opening millions of accounts customers didn't authorize, the bank has junked its old sales incentives, replaced its chairman and chief executive, and paid $185 million in fines.
Bank customers, meanwhile, have received just $3.2 million in refunds. But soon they'll be in line for much more.
On Tuesday, the bank agreed to pay $110 million to settle a class-action lawsuit filed two years ago, a deal that could also put to rest 11 other class-action cases, many filed after the bank's practices were thrown into the national spotlight last September.
The settlement, if approved by a federal judge in San Francisco, would provide payouts to all Wells Fargo customers who say they have been victims of the bank's bad practices from 2009 until now.
Those payments would be on top of any money customers have already received as part of a settlement last year with the Los Angeles city attorney's office and federal regulators.
So far the bank has paid refunds to holders of about 130,000 accounts. It's not clear how many individual customers that represents, as many customers have complained of numerous unauthorized accounts opened in their name.
In a statement, Wells Fargo Chief Executive Tim Sloan called the agreement "another step in our journey to make things right with customers and rebuild trust."
The settlement, which probably won't be finalized until this summer, comes as Wells Fargo continues to face fallout from the accounts scandal first brought to light by a 2013 L.A. Times investigation.
Over the last several months, the company has seen a marked slowdown in its consumer business, with fewer customers visiting branches and opening new accounts.
In a report last week, the bank said credit card applications were down 53% in February compared with the same month last year, while customers opened 40% fewer checking accounts.
Regulators, too, are still punishing the bank. On Tuesday, in a separate announcement, Wells Fargo reported that the Office of the Comptroller of the Currency downgraded its Community Reinvestment Act rating, a measure of how well the bank serves low-income communities.
The OCC said it dropped the bank's rating because of numerous regulatory actions, including the settlement over the unauthorized accounts.
Tuesday's class-action deal has been in the works since September, when the bank and attorneys for Bay Area resident Shahriar Jabbari announced they had reached a tentative settlement in a case Jabbari brought on behalf of himself and other bank customers.
The federal suit, filed in May 2015 in San Francisco, alleged that Wells Fargo regularly opened unauthorized accounts, pushing employees to do so by tying their pay and job security to onerous sales goals.
It was filed shortly after L.A. City Atty. Mike Feuer made similar accusations in his own lawsuit, which led to probes by the Consumer Financial Protection Bureau and the Office of the Comptroller of the Currency. Those matters were put to rest when the bank agreed to pay $185 million in penalties in September.
The investigations found that from 2011 to last year, bank employees opened as many as 2 million checking, savings and credit card accounts that customers didn't want or authorize.
The bank said in September that it had set aside $5 million to pay refunds to customers who were charged fees on unauthorized accounts, and has since pledged to take other steps to make customers whole.
"The $110-million settlement, if approved, will require Wells Fargo to repay the fees charged to class members by Wells Fargo for unauthorized accounts and provide millions of dollars of additional monetary relief to the class," said Derek Loeser, one of the attorneys who negotiated the deal.
The settlement marks a dramatic legal turnaround for Wells Fargo customers, who have had little success in taking the bank to court over unauthorized accounts. The bank has successfully argued in several cases that customers cannot sue the bank and instead must resolve disputes in private arbitration.
It made the same argument in the Jabbari case.
Jabbari opened a Wells Fargo savings account and checking account in 2011, but by 2013 found he had seven additional accounts that he never authorized, according to his lawsuit. He said he received notices from collections agencies asking for fees owed to Wells Fargo related to those accounts.
He sued but U.S. District Judge Vince Chhabria agreed with Wells Fargo that the dispute should go to arbitration.
When the bank's customers open accounts, they sign an agreement saying they will resolve all disputes with the bank in arbitration. Jabbari's attorneys argued in court filings that customers "could not reasonably have believed that Wells Fargo would engage in unrelated, unlawful activity, and then shamelessly attempt to extend the arbitration provision to such activity."
But Chhabria found otherwise, ruling that the arbitration clause Jabbari signed when opening a legitimate account covered all disputes between him and the bank, including over unauthorized accounts.
Jabbari's attorneys were preparing to appeal the case to the 9th Circuit Court of Appeals when they reached the tentative settlement agreement with Wells Fargo.
"We believe this is an outstanding result obtained for the benefit of a proposed nationwide class, notwithstanding Wells Fargo's effort to block the class action with an arbitration clause," said Loeser, a partner at law firm Keller Rohrback.
In a news release Tuesday, Wells Fargo said it chose to settle the Jabbari case despite the arbitration issue "in order to move forward and avoid continued litigation."
The settlement marks the bank's latest step to put the accounts scandal behind it.
The bank recently fired four senior managers, the highest-profile departures since former Chairman and CEO John Stumpf resigned last year. The bank also stripped top executives of their 2016 bonuses and revamped its incentive pay system so that workers are no longer pushed to open unwanted or unauthorized accounts.
The company's board also hired an outside law firm to investigate the bank's sales practices and has promised to release a detailed report in advance of the company's shareholder meeting next month.
The bank remains under investigation by members of Congress and several state and federal agencies, which are looking for evidence of criminal identity theft, violations of labor law and other possible failings.
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7:20 p.m.: This article was updated with more details on the class-action lawsuit, details on the bank's new account openings and other steps Wells Fargo has taken to resolve its unauthorized accounts scandal.
3:55 p.m.: This article was updated with more details on the settlement and a comment from attorney Derek Loeser.