$31.5M Flagstar Bank Settlement Resolves Class Action Lawsuit Over 2021 Data Breaches

New to ClassAction.org? Read our Newswire Disclaimer

Flagstar Bank has agreed to a proposed $31,500,000 settlement to resolve a class action lawsuit over two separate data breaches—the first reportedly occurring in January 2021, and the second in December 2021—that may have compromised the personal information of millions of individuals.

Get class action lawsuit and class action settlement news sent to your inbox – sign up for ClassAction.org’s free weekly newsletter.

The proposed $31.5 million Flagstar Bank class action settlement received preliminary court approval on February 20, 2026 and covers all individuals in the United States whose personally identifying information was impacted by either or both data breaches Flagstar experienced in 2021, as reflected in the class list.

Court documents estimate that the settlement class consists of approximately 2,187,170 individuals, including 364,000 California residents.

Per the agreement, Flagstar settlement class members who submit a timely, valid claim form are eligible for multiple forms of reimbursement.

The agreement states that class members who submit a claim form with proof of documented monetary losses are eligible to receive up to $25,000 in reimbursement. Class members making a claim for monetary losses must include supporting documentation prepared by a third party, the agreement notes, such as invoices or bank statements.

All documented monetary losses must be traceable to the data breach, court documents explain, and include unreimbursed losses related to fraud or identity theft, professional fees, costs for credit repair services, credit monitoring costs, and miscellaneous expenses such as notary, fax, postage or mileage.

Further, class members who resided in California at the time of the data breach are also eligible to submit a claim form for a one-time cash payment of up to $100 due to California-specific statutory legislation. Class members seeking this benefit must submit their name, address, unique class member ID number, and an attestation under penalty of perjury that they were California residents at the time of the data breach, court documents state.

Additionally, all class members may submit a claim form to receive a one-time residual cash payment of up to $599, according to settlement documents. The final amount of the residual cash payment will be a pro rata (equal share) portion of the net settlement fund after the payment of attorneys’ fees, administrative expenses, lead plaintiff service awards and the cost of all other settlement benefits.

Finally, the deal says that all class members may submit a claim form to enroll in three free years of credit monitoring and identity theft insurance.

ClassAction.org will update this page when the court-approved Flagstar Bank settlement website  is live with information on how to submit a claim form.

The agreement reports that Flagstar Bank class members may elect to receive their payments by check or electronic payment upon filing a claim, and all checks must be cashed within 90 days of insurance before they expire.

Class members cannot expect to receive benefits until the court grants final approval to the Flagstar Bank data breach settlement, which will be determined following a hearing on a later date.

The Flagstar Bank class action lawsuit alleged that the financial services provider failed to protect the confidential information stored on its systems, leading to two separate data breaches in 2021.

Head to ClassAction.org’s settlements page for a complete list of data breach settlements.