Mortgage Practices are Killing Black Opportunity

Renowned civil rights attorney Ben Crump of Ben Crump Law, co-counsel Linda Friedman and Suzanne Bish of Stowell & Friedman, plaintiffs and class members in the ongoing litigation against Wells Fargo Monday called on Wells Fargo’s shareholders to adopt a motion brought by SEIU for a racial equity audit and called on mayors around the country to follow NYC Mayor Eric Adams lead in freezing business with Wells Fargo. The plaintiffs and attorneys said Wells Fargo’s discriminatory mortgage practices are “killing Black opportunity.”

Attorneys filed a class action lawsuit against Wells Fargo on behalf of victims of racial redlining and lending discrimination on February 17, 2022, in the Northern District of California, Williams et al v. Wells Fargo, Case No. 3:22-cv-00990, amended on April 14.
At a news conference in Atlanta, plaintiffs and class members highlighted the pattern of racial discrimination experienced by a series of Black Wells Fargo customers and encouraged others to come forward if they have had similar “banking while Black” experiences. Christopher Williams, Sam Albury, and Shaia Beck with Simmons are all plaintiffs in a lawsuit filed April 14 in the Northern District of California.

Wells Fargo, a publicly traded Fortune 500 company, is one of the top residential mortgage providers in the United States, but has been accused of racist and discriminatory tactics for years. In 2020, Wells Fargo approved 67.1% of white borrowers who applied for a mortgage, compared to only 51.8% of Black applicants. Also in 2020, the average interest rate Wells Fargo charged a Black borrower was 3.34%, compared to 3.23% for white borrowers.

“Home ownership is the heart of the American Dream, and Wells Fargo has pushed that dream out of reach for thousands of Black Americans with their blatantly discriminatory loan practices,” Crump said. “Just as we’ve cried out against policing practices that kill Black lives, so we denounce Wells Fargo’s racially motivated banking practices that kill Black opportunity.”

Federal Reserve emergency actions in response to the pandemic pushed mortgage rates to record lows in 2020 and 2021, but Crump said Wells Fargo’s discriminatory practices denied Black customers those benefits by withholding mortgages and charging Black customers higher interest rates.

“We all know the pandemic took a disproportionate toll on Black Americans. But if Wells Fargo had just extended the same opportunities to Black customers as they did to white customers, we could have enjoyed unprecedented progress in closing the home ownership gap among Black Americans, building Black wealth and family stability, driving investment in Black neighborhoods, and increasing intergenerational wealth for Black families,” Crump said. “Instead, Wells Fargo systematically denied Black Americans mortgages, charged them higher interest rates, refused to invest in Black neighborhoods and denied Black Americans the benefits the federal government intended for all Americans to weather the pandemic.”

Crump, the plaintiffs and co-counsel called on Wells Fargo shareholders, who are meeting tomorrow, to pass a motion by SEIU, one of the nation’s biggest labor unions, for an independent racial equity audit. They also urged mayors across the country to stop doing business with Wells Fargo, a step recently taken by New York City Mayor Eric Adams and City Comptroller Brad Lander.

According to the lawsuit, Wells Fargo discriminates against Black/African American customers at every point in the mortgage lending process, including redlining or denying loans to Black/African American customers, especially based on living in predominantly Black/African american communities; reverse redlining or approving loans to Black customers on predatory terms including higher interest rates, costs and fees; exclusion from refinancing; and predatory servicing – taking homes away from Black borrowers through predatory servicing and foreclosure practices.

“The racist and discriminatory practices of Wells Fargo led to emotional distress and the loss of wealth,” said co-counsel Suzanne Bish. “Our plaintiffs were all in positions to secure low-interest loans, but they were all unlawfully discriminated against because of the color of their skin. We won’t let this happen anymore. Banks cannot continue to treat Black and Brown Americans like second class citizens.”

Wells Fargo has faced at least five lawsuits alleging racist and discriminatory practices in recent years. In 2013, for example, Wells Fargo paid $175 million to settle a lawsuit brought by the Department of Justice alleging that the company charged higher rates to Black and Latino borrowers.

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