Wells Fargo & Co has arrived at a USD 94 million settlement for resolving class-action claims it sent to more than 200,000 struggling mortgage borrowers into forbearance during the COVID-19 pandemic without their consent.

The offered settlement was filed last week in the federal court in Columbus, Ohio, and requires a judge’s approval. It resolves claims that Wells Fargo decided to provide forbearances to customers who asked about their mortgages and expressed hardship but did not want relief. It is to be noted that forbearance temporarily suspends the obligation to make mortgage payments.

Reportedly, Wells Fargo’s decision damaged customers’ credit, making it harder and expensive to borrow and hindering their ability to refinance at historically low-interest rates. The decision also violated the CARES Act, which provides for forbearances at borrowers’ request.

The settlement typically covers around 212,000 to 213,000 loans serviced by Wells Fargo. It put into forbearance without informed consent from March 1, 2020, to December 31, 2021.

San Francisco-based Wells Fargo, the fourth-largest US bank, denied wrongdoing in agreeing to settle. It had no immediate comment on Wednesday.