Wells Fargo Discriminates Against Latinos: $175 Million Fine
By Victor Landa, NewsTaco Editor
The U.S. Justice Department slammed their hammer soundly against one of the nation’s largest banks today for discriminating against Latinos and blacks. The announcement, reported in the Washington Post, was made early this afternoon:
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.
As a result, Wells Fargo will have to pay $175 million to settle-up and make things right. This si reportedly the second-largest settlement of it’s kind in history.
The bank will pay $125 million in compensation for 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.
The rest, the other $50 million, will go to direct down-payment assistance to borrowers in the parts of the country where the feds say most of the victims of discrimination live – namely Washington D.C., Chicago, Oakland and San Francisco, Philadelphia, Cleveland, New York City, Riverside, Calif., and Baltimore.
Wells
Fargo, for their part, denies the allegations of discrimination and says that it settled for the sake of avoiding a lengthy and costly legal battle.
[Photo by Wells Fargo]