Throughout the last few years, Wells Fargo has been involved in more than a few controversies due to the company’s business dealings—but a new legal issue could be more damaging to the company than ever. According to reports, Wells Fargo has been formally served with a lawsuit due to allegations that the bank purposely discriminated against Black homeowners.
@Bloomberg exclusively reports, on March 18th Wells Fargo was officially sued for allegedly discriminating against Black homeowners by relying on a modernized version of “redlining” that denied them lower interest rates through refinancing and forced them to pay more for home loans. Redlining dates back decades (originally occurring through the Federal Housing Administration) and is defined as the refusal to insure mortgages in and near Black neighborhoods, and support agreements that block or restrict the sales of homes to Black Americans. The class action lawsuit was filed in San Francisco and further claimed that Wells Fargo’s business practices resulted in Black homeowners being forced into home foreclosure.
The court documents also claim that Wells Fargo knowingly rejected a large number of refinancing applications from Black homeowners back in 2020 at the height of the COVID-19 pandemic in order to lock in lower rates. Additionally, data from over 8 million refinancing applications allegedly shows that Wells Fargo was more likely to approve refinancing bids from White applicants earning between $0 and $63,000 annually than it was for Black applicants earning between $120,000 and $168,000 annually—which a significantly large gap of income.
“Federal data shows that over the last several years thousands of Black homeowners have been unable to maintain the dream of home ownership because of Wells Fargo’s ongoing and discriminatory modern day ‘redlining’ practices. Black applicants are further subjected to delays, feigned mistakes, and other obstacles, leading many Black Americans to withdraw their requests for refinancing, and leading others to wait indefinitely while Wells Fargo refuses to act upon their applications,” the lawsuit reads.
The company is also accused of violating various federal fair credit and housing laws, U.S. and California civil rights statutes and a California state unfair competition law. As of now, Wells Fargo has not publicly commented on the class action lawsuit.
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