Enough is enough. It’s time to throw Wells Fargo away. Just throw the whole company away. It is trash. I wrote in 2019 that the big banking business had practically become synonymous with discriminatory lending accusations; a Bloomberg News report released on Friday shows the bank apparently has no plans of changing.
In 2020, the same year that Wells Fargo agreed to pay $7.8 million in back wages and interest to resolve allegations of hiring discrimination, the company approved only 47% of refinancing applications launched by Black homeowners, Bloomberg reported. That number for white homeowners was 72%.
Tuesday, Mar 15, 2022 · 2:49:58 PM +00:00
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Lauren Sue
In a statement emailed to Daily Kos Monday night, Wells Fargo said the "recent media story ignored critical information known to the authors about Wells Fargo’s strong track record of lending to Black homeowners and the full range of our efforts underway to help meet the homeownership needs of diverse customers.” The company accused Bloomberg of relying “on an analysis designed to present a skewed picture” of its lending efforts.
"The same data source used in the reporting—from lenders’ Home Mortgage Disclosure Act filings—shows that Wells Fargo originated more home loans to Black and Hispanic customers than any other bank over the last 10 years,” the company claimed. “The approximately 8,400 mortgage refinances we provided to Black homeowners in 2020 were more than any of the largest banks—a crucial fact never mentioned in the story—and in 2021 we increased that total by 88% and provided more than 15,700 mortgage refinances to Black homeowners."
Wells Fargo totted programs aimed at making homes accessible to low- and moderate-income families and a focus to pursue more than $185 billion in "diverse lending commitments."
The company did not detail how many Black applicants specifically were approved to participate in the programs compared to white applicants. Nor did it address the question of why a greater disparity exists at Wells Fargo between white and Black customers looking to refinance. Simply approving more Black applicants than the next company when you're also approving more white applicants (and more applicants in general) than the next company doesn't exactly speak to disparities between racial groups.
For a few points of comparison:
JPMorgan Chase & Co. approved 81% of Black homeowners' refinancing applications compared to 90% approved from white homeowners. Bank of America gave 66% of Black applicants the green light compared to 78% of white ones, and Rocket Mortgage approved 79% of Black applicants compared to 86% of their white counterparts, Bloomberg reported.
Engineer Mauise Ricard III, one of those Black applicants Wells Fargo rejected, told Bloomberg he paid $560.42 to apply to have his home refinanced on Valentine's Day in an Atlanta suburb. The loan officer told Ricard, who has a credit score above 800 and is married to a doctor, that his appraisal would probably be fast-tracked. Instead, the loan officer emailed him to say that “perhaps the area is not eligible,” and that he would have to pay a higher interest rate of 4.5%—even amid what were historically low interest rates at the time. Ricard told Bloomberg his property is located in a Black neighborhood.
“They kept moving the needle,” Ricard says. “They didn’t want to move forward for whatever reason.”
In 2012, Wells Fargo settled a $175 million lawsuit after being accused of charging Black and Latino customers higher rates on mortgages, according to Reuters.
Six years later, in 2018, the city of Sacramento accused the company of a "long-standing pattern and practice" of illegal lending that lowered home values, upped foreclosures, and capped property tax revenue used to fund schools in minority communities, according to CNN.
And in 2019, the Philadelphia Inquirer reported on Dec. 16 that Wells Fargo was set to pay Philadelphia $10 million to settle a lawsuit alleging lending discrimination targeting minorities.
Wells Fargo didn't immediately respond to a Daily Kos request for comment, but the company told Bloomberg it treats its potential borrowers the same, "is more selective than other lenders, and an internal review of the bank’s 2020 refinancing decisions confirmed that 'additional, legitimate, credit-related factors' were responsible for the differences."
Ricard told Bloomberg he was ultimately able to get his home refinanced through another lender—at a 3.35% interest rate.
“It’s sad that as a banking institution that they essentially can’t be trusted,” Ricard told Bloomberg. “As an African American, a person of color, we deal with enough hardships that life hands us. To be discriminated against financially is a hardship.”
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