California attorney general joins Oakland’s suit against Wells Fargo for predatory lending
Lawsuit accuses bank of steering minorities toward high-cost loans
California’s top cop is wading into a lawsuit against Wells Fargo alleging that the bank engaged in predatory mortgage lending.
Attorney General Xavier Becerra on Thursday announced he had filed an amicus brief in support of Oakland’s suit against the company, which accuses Wells Fargo of steering minority borrowers toward higherrisk, higher- cost loans than white borrowers.
“Equal access to housing starts with equal and fair access to our financial institutions,” Becerra said in a statement. “For many African-Americans and Latinos, the hardships of the mortgage crisis haven’t stopped. Our fight for economic justice continues and I’m proud to stand with the city of Oakland in this effort to combat predatory lending in our state.”
The case is before the U.S. Court of Appeals for the Ninth Circuit, where Wells Fargo wants a judge to dismiss the suit. The bank says it has been a fair lender and does not discriminate.
Originally filed by Oakland in 2015, the suit alleges that Wells Fargo violated the federal Fair Housing Act and the California Fair Employment and Housing Act and hurt the city by directing minority borrowers toward risky loans and refusing to allow many of them to refinance. Black and Latino borrowers, the suit says, were more than twice as likely to receive a bad loan than similar customers. Such practices, Oakland argued, hurt property values in minority com
munities, limited property tax revenue and raised the costs of providing city services.
“Wells Fargo’s racially discriminatory mortgage lending practices against African- Americans and Hispanics have devastated individuals, families, and communities in Oakland, throughout California, and across the country where Wells Fargo operates, dramatically increasing foreclosures and decreasing the Black and Latino middle class,” Oakland City Attorney Barbara Parker said in a statement.
“Evidence shows that Wells Fargo systematically provided more expensive and higher risk loans to African-American and Hispanic borrowers in Oakland and other cities who qualified for the more favorable loans that the bank offered to white borrowers,” Parker continued. “We applaud Attorney General Becerra for standing with Oakland to hold Wells Fargo accountable and stop these racially discriminatory practices.”
In the amicus brief, Becerra argued that the bank’s practices leave minority communities particularly vulnerable to foreclosures, which can have reverberating effects, from increased homelessness and a decline in physical and mental health for stressed borrowers to the deterioration of schools.
The bank has denied the accusations.
“We continue to disagree with the city’s accusations in this appeal and we are prepared to present strong arguments in support of our long history of fair and responsible lending in Oakland and across the country,” company spokesman Ruben Pulido said in an email on Thursday.
“Wells Fargo has been a part the Oakland community for more than 140 years and will continue our longstanding efforts to work with customers, credit counselors, nonprofit organizations and government agencies to expand homeownership and revitalize distressed neighborhoods. We will continue to focus on helping customers succeed financially and expanding homeownership in California and throughout the United States.”