Wells Fargo Bank Settles California Check-Cashing Suit

LOS ANGELES – Wells Fargo Bank has settled a California class action lawsuit about its $5 check cashing fee. The suit was brought April of last year by Chaffee Enterprises on behalf of California employers who claim that the bank’s check cashing fee, charged to non-accountholder employees, could place employers in violation of the California Labor Code.

Under the terms of the settlement, Wells Fargo will offer free direct deposit for certain small business customers for a period of one year commencing September 1, 2005. By having their payroll deposited into an account through Direct Deposit, qualifying employees of Wells Fargo small business customers will be able to open a Wells Fargo checking account free of monthly service fees, therefore, avoiding non-accountholder check cashing fees.

“The vast majority of businesses in the U.S. are small businesses. As the number one lender to small businesses in the country, Wells Fargo is committed to providing products and services that help our small business customers and their employees succeed financially,” said Laura Schulte, president of Wells Fargo’s California Community Bank. “Settling this lawsuit makes good sense for our small business customers, their employees and for Wells Fargo.”

“We are proud to have helped employers in this matter, while at the same time assisting those employees who may not otherwise be able to afford the check cashing fee imposed by the bank,” said Nicholas P. Roxborough of Roxborough, Pomerance & Nye LLP.

Wells Fargo will mail information to its small business customers in California, as identified in the settlement agreement, about direct deposit payroll services.