Court Approves Settlement Creating $100 Million Mortgage Assistance Fund at Large Bank

A California federal judge recently approved the settlement of a class action shareholder derivative claim against a large bank.  As part of the settlement, the bank will create a $100 million borrower assistance fund for mortgages to assist low- and moderate-income borrowers living in or purchasing property in certain geographic areas.  This program will exist for at least three years.

Plaintiffs in the lawsuit had alleged that certain of the bank’s directors and officers breached their duty of oversight, and also alleged that the bank violated federal securities laws by issuing materially false and misleading statements and failing to disclose facts regarding the bank’s hiring practices.

The court found that the settlement was fair and reasonable, and stated that the settlement “marks an encouraging move toward a more inclusive and responsible banking framework.”