A federal suit accuses Wells Fargo, one of the largest bank in the country, of having mortgage origination and underwriting practices that “intentionally and disproportionately” discriminate against Black home mortgage applicants.
The plaintiff alleges in the 14-page suit that Wells Fargo has a “long history” of discriminating against African Americans and maintains a corporate culture “replete with harmful racial stereotypes and biased views” about African American customers.
Ten years ago Wells Fargo paid $175 million after reaching a settlement with federal authorities over similar allegations involving Black and Hispanic borrowers.
The bank, according to the Justice Department “engaged in a pattern or practice of discrimination against qualified African-American and Hispanic borrowers in its mortgage lending from 2004 through 2009.”
The settlement with the Justice department was then the second largest fair lending settlement in the department’s history.
At that time Wells Fargo Bank was the largest residential home mortgage originator in the United States.
The latest suit accuses the bank of continuing “discriminating against African Americans and maintains a corporate culture replete with harmful racial stereotypes and biased views about African American customers.
It’s basis in setting rates, the suit says, “serve to intentionally exclude Black or African American borrowers from affordable and lower-risk loans, force African American borrowers to pay higher interest rates and other fees that similarly situated white borrowers, and have a disparate impact based on race.”
The suit says:
“While Wells Fargo has long advertised its willingness to symbolically support racial equality in banking, such as making investments to black owned banks, it has not and will not meaningfully redress its systematic discrimination against its Black and African American customers, borrowers, and mortgage applicants.”
Wells Fargo’s racial bias is illustrated by racial redlining and other discriminatory practices against customers of color, as illustrated in a number of recent lawsuits and settlements.
For example, in 2011, a jury found Wells Fargo guilty of systematically discriminating against
minority home buyers by using a computer software for minority homeowners which resulted in
them paying more for their home loans than white borrowers.
Wells Fargo’s racial bias is illustrated by racial redlining and other discriminatory practices against customers of color, as illustrated in a number of recent lawsuits and settlements.
Wells Fargo has also paid hundreds of millions of dollars to avoid litigating its discriminatory home
lending practices. Indeed, Wells Fargo agreed to a settlement valued at over $440 million of a
lawsuit challenging the Firm’s redlining practices that resulted in a disproportionate number of
foreclosures in African American neighborhoods in Shelby County and the City of Memphis.
The plaintiff in the latest suit, which seeks to be declared as a class action, is a Black man with a FICO credit score over 750 when he applied for his mortgage.
The bank, however, is accused to offering him a mortgage rate much higher than it did for others with the same credit score.
Believing it to be a mistake, the plaintiff, according to the suit, “spoke to Wells Fargo’s home lending department to have his credit report rechecked and for his interest rate to be lowered. Instead, the Firm refused to reconsider his credit score or his interest rate.”
The plaintiff then went to another bank where he received a much better rate than what Wells Fargo offered.
