Wells Fargo sued for alleged discrimination against Blacks
Wells Fargo & Co. faces a lawsuit for allegedly discriminating against Black borrowers and homeowners by practicing this new era’s version of “redlining.” Wells Fargo is allegedly denying Black homeowners lower interest rates in financing, which causes them to pay more for loans.
Redlining by definition is the refusal to provide mortgages in and any near Black neighborhoods. It also encompasses any agreement that restricts or bans the sale of any property to Black Americans.
Homeownership is one of the best ways to build wealth, so I was extremely frustrated to hear reports that Wells Fargo has denied a higher percentage of refinancing requests from Black and Latino homeowners. We must investigate this and ensure equal opportunity in housing.
— Mark Warner (@MarkWarner) March 20, 2022
A Bloomberg News report also cites that Wells Fargo has far by rejected an unacceptable amount of Black homeowners’ finance applications in 2020, even when the pandemic crisis lessened the availability of houses at much lower rates.
As the third-largest commercial bank in the United States,Wells Fargo has a record of wrongdoings in its banking policies. In 2020, Wells Fargo only approved 47 percent of applications from Black applicants. While there was a 72 percent approval of the white applicants.
The complaint states, “Federal data shows that over the last several years thousands of Black homeowners have been unable to maintain the dream of homeownership because of Wells Fargo’s ongoing and discriminatory modern-day ‘redlining’ practices.”
Wells Fargo denied half of Black homeowners' refinancing requests in 2020, @business says.
▪️ Highest-income Black applicants approved at same rate as lowest-income white applicants
▪️In 2012, Wells Fargo paid $184M for claims it discriminated against Black & Hispanic borrowers pic.twitter.com/jQOAGOc2kz
— AJ+ (@ajplus) March 14, 2022
Other Wells Fargo Data
Data shows that in the refinancing applications in 2020 with 8 million applicants, white borrowers have higher chances of getting approvals. The lawsuit states that Wells Fargo is more likely to approve white applicants earning less than the high-income Black applicants.
A white borrower earning from $0-$63,000 annually can get approval than a Black applicant that earns $120,000 – $168,000 annually.
According to the complaint, “Black applicants are further subjected to delays, feigned mistakes, and other obstacles, leading many Black Americans to withdraw their requests for refinancing, and leading others to wait indefinitely while Wells Fargo refuses to act upon their applications.”
The largest commercial bank by assets, JPMorgan Chase and Co. has shown a record of larger and proportionate approvals of refinancing applications by the Black borrowers. They have approved 81 percent of Black applicants while approving 90 percent of whites.
The lawsuit is filed in the US District Court of the Northern District of California. It entails alleged violations of federal fair credit and housing laws. As well as California’s discriminatory competition law.