Just want to say for this and other reasons, I’m happy to be an ex-Wells Fargo customer. They’re not the only bank that steered minority borrowers who qualified for regular loans to subprime mortgages, but I don’t think $175 million begins to pay for the harm they’ve caused. It’s more like a slap on the hand. After all, their lending practices helped perpetuate the lingering myth that minorities crashed the economy – when it was really their own damned greed:
WASHINGTON — Wells Fargo Bank will pay at least $175 million to settle accusations that it discriminated against African-American and Hispanic borrowers in violation of fair-lending laws, the Justice Department announced Thursday.
Wells Fargo, the nation’s largest residential home mortgage originator, allegedly engaged in apattern or practice of discrimination against qualified African-American and Hispanic borrowers from 2004 through 2009.
At a news conference, Deputy Attorney General James Cole said the bank’s discriminatory lending practices resulted in more than 34,000 African-American and Hispanic borrowers in 36 states and the District of Columbia paying higher rates for loans solely because of the color of their skin.
Cole said that with the settlement, the second largest of its kind in history, the government will ensure that borrowers hit hard by the housing crisis will have an opportunity to access homeownership.
The bank will pay $125 million in compensation for borrowers who were steered into subprime mortgages or who paid higher fees and rates than white borrowers because of their race or national origin rather than because of differences in credit-worthiness.
Wells Fargo also will pay $50 million in direct down payment assistance to borrowers in areas of the country where the Justice Department identified large number of discrimination victims. Those areas are Washington, D.C., Chicago, Philadelphia, Oakland and San Francisco, New York City, Cleveland, Riverside, Calif., and Baltimore.