Wells-Fargo Agrees to Refund Overcharges to Military Families

Wells-Fargo& Co.hasagreed tosettle a class action lawsuit that alleged the bank charged military veterans improperly high fees when they refinanced their mortgages.

The bank, the nation's largest mortgage originator, willrefund up to $10 million in fees to eligible military veterans who refinanced their mortgages with the bank.

Eligible veterans who apply would receive $175 each.

Veterans who refinanced with Wells Fargo between Jan. 20, 2004, and Oct. 7, 2010, are eligible for the refunds.

The suit, filed in Troup County, Ga., claimed the bank "failed to exercise reasonable care" in assessing attorney fees according to Veterans Administration's Interest Rate Reduction Refinancing Loan rules.

The bank said it will contact eligible veterans by mail in about a month.

"Since the lawsuit allegation was raised, we have diligently worked with our veteran customers who inquired about their fees and we refunded them if there was an error in the third-party charges that were assessed," Cara Heiden, co-president of Wells Fargo Home Mortgage, said in an email statement to The Wall Street Journal.

Wells Fargo said the interest limits it violated are complex and can be confusing. It said that not all veterans were overcharged but said it will provide the refund to all veterans who refinanced during the period covered by the settlement.

Latest scandal 

It's the latest scandal involving military families being overcharged and mistreated by banks.

Earlier this week, J.P. Morgan Chase & Co. apologized for wrongly foreclosing on 18 military families and overcharging at least 4,500 active duty military families.

Chase said it is mailing about $2 million to more than 4,000 military families that were overcharged and said it has already resolved 13 of the 14 foreclosures.

But the settlements and apologies may not be enough to silence the banks' critics.Forty members of the House of Representatives have signed a letter to House Committee on Financial Services Chairman Spencer Bachus (R-AL) calling for a hearing on the subject.

In the letter to Buchus, the House members say they believe the oversight and investigation of bank foreclosure practices, which began last fall, should continue in the 112th Congress.

"Improper actions on the part of banks and financial lenders like JPMorgan Chase, Ally Financial, and Bank of America are something that we have witnessed with increasing frequency with practices such as robo-signing, signing foreclosure forms without even reading them, and even forging documents outright. Unfortunately, it seems that these financial institutions are trying to maintain their bottom line at the expense of American families," the lawmakers said.