Wells Fargo Pays $175M to Settle Race Discrimination Probe

MSNBC, July 12, 2012

The Justice Department says Wells Fargo & Co. will pay at least $175 million to settle accusations that it allegedly discriminated against qualified African-American and Hispanic borrowers in its mortgage lending from 2004 through 2009.

The settlement, which needs approval from a judge, would end the investigation into whether the fourth largest U.S. bank between 2004 and 2009 knowingly targeted minorities for risky mortgages that came with higher costs, according to documents filed in the U.S. District Court for the District of Columbia.

“The Department of Justice today filed the second largest fair lending settlement in the department’s history to resolve allegations that Wells Fargo Bank, the largest residential home mortgage originator in the United States, engaged in a pattern or practice of discrimination against qualified African-American and Hispanic borrowers in its mortgage lending from 2004 through 2009,” said a statement from the U.S. Department of Justice.

The settlement will provide $125 million in compensation for minority borrowers the DOJ said were steered into subprime mortgages, which usually carry higher fees. Wells Fargo will pay $50 million more in direct down payment assistance to borrowers in parts of the country where the DOJ identified large numbers of discrimination victims.

At a news conference, Deputy Attorney General James Cole said the government will ensure that borrowers hit hard by the housing crisis will have an opportunity to access homeownership.

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.

{snip}

Wells Fargo noted in a statement that it has denied the claims.

“Wells Fargo is settling this matter solely for the purpose of avoiding contested litigation with the DOJ,” it said, “and to instead devote its resources to continuing to provide fair credit services and choices to eligible customers and important and meaningful assistance to borrowers in distressed U.S. real estate markets.”

The disclosure came after Bank of America Corp’s Countrywide Financial unit agreed in December to pay a record $335 million to settle similar charges.

{snip}

[Editor’s Note: Jared Taylor’s article on the Bank of America settlement can be read here.]

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  • Not much to say.  The Obama gang is endlessly using the DOJ to try to construct the false history revisionist narrative about the subprime crisis and the resultant financial crash.

  • Detroit_WASP

    Attempting to prop up and help blacks caused the mortgage meltdown in urbania all across America.  Now they are cashing in AGAIN!  Astonishing.

  • TonyWestfield

    1. Find out where the money is.
    2. Figure out how to get your hands on the money.

    Hey, wait — whose strategy is this?

    Could be the government.
    Could be the common thief who pistol-whips you in your home, in your car, on the sidewalk, etc.

    Let me check the faces of the aggressors…

    Well, THAT was easy, looks like one big family.

    P.S., What’s the name of that special sort of “lottery” that I keep hearing about?
    Begins with “G” — oh, “Gh” I think.  Rhymes with stiletto?  Gosh, can’t remember.

  • guest

    This must be another one of the reasons why this country’s in such an economic mess – millions of dollars being paid for all of these “racial discrimination” lawsuits.  This alone should be enough proof that diversity comes with a heavy price.

  • SO its my white privilege to know better than to take out a 500% APR payday loan.

  • We didn’t have these problems when our country was 90% White. “Diversity is our greatest strength” is nothing more than a platitude….

    • Really, when I was born, this country was almost 95% white. Traditional America was in full bloom, blacks weren’t given free health care, housing, food and education- we kept their numbers down. No illegal problems either, Pres. Ike simply got rid of the mexicans when it was apparent too many were here. What happened? Some of what I could say wouldn’t get printed here but a certain group was kept out of control as well. Democrats were just softy conservatives for the most part. And banks were not run for the sport of blacks, hispanics, and whatever else minority and johnny come lately wished to steal our treasure. There is no control over the vagaries that we may expect, the inmates are in charge of the mental ward.

  • MekongDelta69

    The banks were forced to give those loans out by the Community Reinvestment Act. What sane corporation would give money knowing nobody could pay the loans back?

    Oh well – never mind all that:
    $50 million to Sharpton
    $50 million to Jackson
    $100 million to Holder.

  • APaige

    “paying higher rates for loans solely because of the color of their skin.” NO. Paying higher rates because they were stupid or too lazy to apply elsewhere for a loan. If I offer person A a pen for $5 and person B the same pen for $10 and he/she accepts the offer-THAT IS THEIR CHOICE. They were not discriminated against-they failed to discriminate.

  •  This is why I’m not down with the notion of exclusive governmental culpability.

    We have a two-party duopoly sometimes appears to be corporate-run monopoly Federal government.  If the banks didn’t want to do these affirmative action loans, they could have used K Street as a base to launch a full frontal assault on Congress, and most likely would have won.  They made these loans partially because they agreed with the ideology behind it.  This is why I was not really happy that we bailed most of these firms out.  The only “bailout” we needed to do was to bolster the FDIC to keep old ladies’ savings accounts from going down the drain with these firms, that’s it.

  • They charged a higher mortgage rate because they were riskier loans, not pigmentation. Obama wants to treat blacks like babies, not responsible for anything.

  • Sloppo

    I think I understand justice now.  If a bank makes loans to blacks who can’t pay the money back then they are a “predatory lender”.  If the bank doesn’t make those loans to those blacks, then they are “discriminating” and must be sued.  

  • haroldcrews

    Does no one else see the issue of the Justice Department, which has the power to destroy Wells Fargo if it decides to, suing the same company for the sake of a favored constituency?  WF holds an enormous number of the mortgage loans in the US.  It holds a majority of them if I remember correctly.  The Justice Dept could easily bring a anti-trust action against WF if it wants.  Is it any wonder that WF settled?  If a bank worth billions can’t fight the government who can?  This is flat out extortion.

    Not that I disagree with anything else said as far as WF (and presumably all of us) being in a Catch-22.

  • The__Bobster

    http://www.vdare.com/letters/a-wells-fargo-executive-calls-his-employer-diversity-crazed

    Every day Wells Fargo, a prominent corporate member of the Treason Lobby, subjects its employees (“team members”) to endless stories in the company news focusing on how the bank is celebrating multiculturalism, diversity and Third World immigration.

    The latest is the recent visit by Mexico’s President Vicente Fox to Utah where diversity-crazed executives rushed to pay homage to their hero.

    It’s frustrating that this anti-American and anti-White agenda by an erstwhile American corporation continues to go unpunished.

    Below you can read the Wells Fargo internal memorandum dated July 5, 2006 and titled “Presidential Visit.”

    http://www.vdare.com/letters/another-wells-fargo-employee-says-the-bank-aids-and-abets-illegal-immigration

    As a Wells Fargo employee, I too read the July 5 article that the letter writer refers to and I also had the same conclusion:  that Wells Fargo is aiding and abetting illegal immigration.

    Actually, I reached my conclusion several years ago when Wells Fargo started accepting the Matricula Consular card to open accounts. One would logically assume that if one were in the country legally, a proper Social Security Number or Tax Identification Number would be available. 

    What makes me really shake my head in disbelief is there is an Ethics course that employees must complete each year! There we are taught that if we see an illegal activity we are obliged to report it. 

  •  What Carter, Clinton, Kennedy et al. did was bad enough.

    But Bush 43’s demand for no down payment mortgages was the sine qua non of the subprime crisis.

    Must I re-post The Great Mortgage Rant of 2011?

  •  Jesse Sr came out last week for extending the existing marginal income tax rates (“Bush tax cuts”) for incomes $1 million a year and under.  I presume, therefore, he pulls in close to a megabuck a year.  That one-percenter him.  Occupy Rainbow-PUSH, anyone?

  • This is what my grandparents feared, one day we would be made the slaves.

  • LaSantaHermandad

     The POTUS  needs to be back in Chicago with his good friend Rahm Emmanuel. They could spend every day roaming around the South Side protecting kids from being shot by the out of control youths. I’ll wager that Malia and Sasha wouldn’t be attending the public schools in the city. They seem like nice kids and no good parent would expose them to such horror. But when we damnable Whites want to protect our kids from the same dangers, we are branded as racist.
    How can they continue down this road when all the evidence over the last 60 years points directly to the  absolute futility of this costly, protracted  endeavor?
    The metaphor about arranging deck chairs on the Titanic is so apropos here.

    •  We don’t need to play your hunch about the two young Miss Obamas.  They go to Sidwell friends instead of the DCPS.

      • LaSantaHermandad

        Thanks. And I’m sure they’ll find a fine school in Chicago perhaps the same school that Emmanuel’s kids attend, assuming of course that he HAS kids. 

    • LaSantaHermandad

      I have a feeling that Wells Fargo is being persecuted for it’s connections to slavery in the past.
      Morals aside, slavery was a legal industry at the time and one shouldn’t impose apply punishments to people who weren’t alive during that particular period.  Should we continue to punish present day Germans for the SHOAH?

  •  You have to admit that the impetus for these mortgages was pandering to otherwise not creditworthy non-whites, especially blacks and Hispanics.  Just because other people got on the bandwagon, and that some real estate flippers made a good living for awhile in earnest, doesn’t change that fact.  Blaming the flippers is a diversion.

  • LudwigvonDrake

    All American Banks, large and small, are depending upon the Fed and therefore the Federal Government for their very survival.  They have been provided with so much printed money since January 2009, the figures are beyond astronomical (i.e. way up in the $trillions).  TARP, followed by QE1, QE2, not to mention the premium interest rate that the Fed pays these banks to sit on $trillions in this monopoly money rather than allow it into circulation (which only delays the inevitable consequence: inflation), the figures are staggering.  The “monetization” printing presses have never before seen such a high level of activity. 

    The banks will continue to do and say ANYTHING to satisfy their master, after all the Fed is comprized of these very “private” banking institutions.  They are simply taking some pocket change out of their money clip and depositing it into their own checking account.  Meanwhile, the Wall Street band plays on as the good ship Titanic steams all ahead full toward the iceberg of fiscal insolvency.  Argentina, here we come. 

  • AmRem

    I havent read the article, but I will later.

    I just wanted to report that I slayed this Black Supremacist in an Race-IQ debate, even though he was going to university to be an engineer I still got the better of him.

    The next up is my old marxist teacher, who made the subject a central issue in his class.

    I will gain victory.

    Hooyah

  • I don’t care how much you hate Nixon, what that president did ethicly wrong so pales in comparison to the crooked obama administration that it is laughable to discuss the two in the same conversation. Obama and who knows how many of his henchmen in all governmental agencies should spend the rest of their lives in jail or if the crime fits, the death penalty. It is what used to happen to treasonists.

  • APaige

    The article stated that they were charged higher rates “solely”-which I assumed meant the bank considered their credit rating and charged more based on the fact that they would pay. I am sure these were people that had a chance for lower rates but did not make that decision.

  • I worker for Wells Fargo as an Auditor /Underwriter in real estate finance I filed a federal lawsuit against them for discrimination the ignored my complaint and now millions have lost their homes.
    Darryl Grayson
    Darryl Grayson & Associates
    213-909-1807

  • Wells Fargo is a Predatory Lender and a Predatory Employer.
    I filed a discrimination lawsuit several years ago then millions lost thier homes
    I was hired to audit and underwrite real estate loans
    Darryl Grayson
    Darryl Grayson & Associates
    213-909-1807