Wells Fargo Accused of Alleged Lending Discrimination; Requests More Time to Respond to Expert Opinions 

PC: Mike Mozart
Via Flickr.com

By Estrella Torres

SAN FRANCISCO, CAWells Fargo Bank is currently the subject of a nationwide class action lawsuit backed by expert reports alleging the bank discriminates against Black, Latino/Hispanic and Asian homebuyers in its lending practices, according to the Ellis George Law firm.

Dennis S. Ellis quoted the suit that maintains, “Black and other minority applicants had their applications intentionally and disproportionately denied, faced unjustified delays in the processing of their applications, and were given less favorable terms, which resulted in Wells Fargo systematically engaging in a new form of redlining that harmed Plaintiffs based on their race and ethnicity.”

The lawsuit expands on such disparities, showcasing how “Wells Fargo also frequently imposes higher costs on non-white borrowers relative to the size of their loans” and “charges higher costs and interest rates to non-white customers who obtain refinancing.”

Consequently, Ellis describes how the bank has filed a motion to have three additional weeks to refute the expert opinions in support of the lawsuit saying it must “ understand the basis for Plaintiffs’ expert opinion” and that if the time request is not granted, it will “suffer substantial harm and be materially prejudiced.”

Ellis notes, “Wells Fargo is obviously concerned with the expert evidence the Plaintiffs have submitted in support of their claims in this case, which will support  the Plaintiffs’ motion to certify a class of affected minorities who were subjected to Wells Fargo’s discriminatory lending practices.”

These disparities in Wells Fargo’s lending outcomes demonstrate a “digital redlining, disguised through so-called neutral algorithms,” according to an article by Bloomberg News.

The Bloomberg article investigates the disclosed Wells Fargo data, finding “only 47 percent of Black homeowners who completed a refinance application with Wells Fargo in 2020 were approved, compared with 72 percent of white homeowners” and “Wells Fargo had the biggest disparity and was alone in rejecting more Black homeowners than it accepted.”

“If we allow racist and discriminatory policies to persist, we will not live up to our country’s ideals,” postulated the head of the Consumer Financial Protection Bureau (CFPB), Rohit Copra. 

Andre Perry, who conducted a study comparing the value of Black homes and white homes, details how not allowing such communities to purchase homes “means that people have fewer resources to invest in their children …to start businesses …to renovate their homes…buy additional homes.”

Additionally, Ellis adds, “Wells Fargo had ample opportunity to address the effect of its lending practices and the harm it was causing as a company to hundreds of thousands of minorities, but chose to do nothing to alter its policies that were denying loans to those citizens at record disparities as opposed to White Americans. 

“Wells Fargo should not be afforded three (3) additional weeks to answer the Plaintiffs’ experts.  The fact that Wells Fargo years after instituting the discriminatory policies that have caused so much damage to its minority mortgage loan applicants still has no answer for its actions is appalling.”

In the past, Wells Fargo has had its fair share of discrimination allegations in its lending practices, when the CFPB found “statistically significant disparities” in the mortgage rates between Black borrowers with other customers, according to Ellis.  

Despite such allegations and lawsuits backed by experts, Wells Fargo maintains it is “proud to be the largest bank lender to minority families,” garnering much backlash from Ellis, who insists the bank asserts these claims “ … as though that provides it with some sort of immunity for the unquestionable generational harm it has done to our community and other minorities through its lending practices.”

“The only thing that Wells Fargo can honestly claim being number one at during the period alleged in our lawsuit from 2018-2022, is denying more Black applicants the American dream of owning their own home by rejecting their loan applications, which we intend to prove was for discriminatory reasons,” the lawsuit charges.

Ben Crump, a civil rights attorney and a co-counsel on the lawsuit, said, “Systematic racial discrimination in home ownership and financing is one of the most significant causes for the stark differences in generational wealth between Black Americans and others.

“That Wells Fargo would continue to exhibit this kind of behavior in the 21st century is unconscionable.  This case is about justice, not only for the named plaintiffs in this case but for every Black applicant or homeowner who was turned away by Wells Fargo because of the color of their skin. There should be no further delays in our attempt to hold Wells Fargo accountable for its wrongdoing, and we will thus oppose the request,” continued Crump. 

About The Author

Estrella Torres is a first-generation Latina student in her 3rd year at the University of California, Los Angeles. She is pursuing a major in Political Science and a minor in Public Affairs. Estrella has a strong passion and dedication to addressing social justice issues and political activism both in her high school and university. Her positionality as a student coming from a Mexican immigrant household has fueled her to pursue career goals involved with social justice and immigration law. She hopes to help undocumented immigrants as a lawyer and promote policies that would better their lives and provide them with fair and equal opportunities. Because of this, she is planning to go on the pre-law track and foster her skills of reading, writing, analyzing, and critical thinking. She hoped to gain more experience in journalism as regards law, local government, and public policy that would further prepare her for her goals.

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