Wells Fargo & Co. has agreed to pay up to $6.8 million to settle a class-action lawsuit accusing it of improper subprime mortgage lending practices in California, Reuters reported.

In a joint statement, the bank and lawyers for the plaintiffs said Des Moines-based Wells Fargo Financial Inc. will earmark $2.4 million to provide relief to class members who are more than 60 days late on loan payments.

Wells Fargo Financial also agreed to make up to $4.4 million in cash payments to class members who submit claims. The company said it will also continue improvements it has made in its lending practices in the past three years.

The settlement resolves a lawsuit filed in December 2003 by the Association of Community Organizations for Reform Now, an advocacy group for low-income people. It alleged that Wells Fargo Financial failed to properly disclose points and prepayment penalties to borrowers.

It said the unit also inaccurately reported some borrowers’ loan balances to credit reporting agencies.