Discrimination allegations continue to swirl around Wells Fargo, the country’s leading home mortgage lender, as the firm tries to head off the Justice Department claims that African-American borrowers were saddled with higher than average interest rates during the housing bubble that peaked in 2008.
Anonymous sources told the Huffington Post that Wells Fargo is currently involved in pre-lawsuit negotiations with the DOJ’s Civil Rights division’s Fair Lending Unit in hopes to settle the dispute and avoid a full-blown public case.
The latest developments follow an agreement in July with the Federal Reserve to pay $85 million to settle Fed civil charges that more than 10,000 borrowers were improperly steered into subprime mortgage loans or were the victims of loans based on fabricated information.
The bank is also battling a suit filed by Baltimore city officials who say Wells Fargo employed similar practices against African-American borrowers in predominantly Black neighborhoods, knowing they would default on their loans so they could ultimately sell their accounts to investors. Wells Fargo is also facing similar suits in Memphis and in San Francisco.
Officials from the bank are adamantly denying all accusations.
“We have a very strong commitment to serving all customers along the credit spectrum, and we do so without bias,” Vickee Adams, a spokeswoman for Wells Fargo. told the Post. “That’s the type of responsible lending that we practice.”
At the time of the bank’s settlement with the federal central bank, Wells Fargo Chairman and CEO John Stumpf turned aside the allegations.
“The alleged actions committed by a relatively small group of team members are not what we stand for at Wells Fargo,” Stumpf’s statement read. “Fair and responsible lending practices have been at the core of our culture, and they will continue to guide us as we work closely with the Federal Reserve to provide restitution to customers who may have been harmed, and to reinforce our internal controls so they further reflect Wells Fargo’s commitment to helping customers succeed financially.”
Bartlett Naylor of the nonprofit consumer advocacy group Public Citizen, told Press TV that the issue is exposing racist lending practices.
“This particular case is sharpening the focus on issues of racism which is as nasty and as regrettable as it gets,” Naylor told Press TV. “It’s not simply a wholesale fraud but it’s targeted at a group that has traditionally suffered a lack of credit.”