Wells Fargo Ordered to Pay $175M+ for Discriminating Against Black, Hispanic Borrowers
The Justice Department has decided that Wells Fargo violated fair-lending laws by discriminating against Black and Hispanic borrowers. The bank's penalty? At least $175 million.
Wells Fargo, the nation’s largest residential home mortgage originator, allegedly engaged in a pattern 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.
Let that last sentence sink in for a minute. Thirty-four thousand borrowers. Paying higher loan rates. Because of their skin color.
Post-racial society my ass.
So where will all those millions of dollars go? About $125 million will go directly to 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," while an additional $50 mill will be paid out in "direct down payment assistance to borrowers in areas of the country where the Justice Department identified large number of discrimination victims."