Wells Fargo Still Hasn't Addressed Its Troubling Pattern Of Racism [View all]

[Blue_Tires]

Wells Fargo & Co. just settled a lawsuit alleging that the San Francisco financial services firm targeted African-American borrowers for predatory lending in Memphis and Shelby County. The development, which isn’t the only one of its kind, warns of a disregard for fairness that can also impact investors.

Memphis and Shelby had filed a claim in December 2009, alleging that 43.2% of Wells Fargo’s foreclosures were in predominantly African-American neighborhoods while only 21.5% were in predominantly white neighborhoods. At the same time Wells Fargo had allegedly granted the majority of its loans to whites. The claim also alleged things such as the drafting of marketing materials for the lowest quality mortgages in what the bank had defined as African-American language.

Wells Fargo promised to make $425 million in mortgages available to Memphis and Shelby residents within the next five years, nearly a third of which shall go to low- and moderate-income borrowers. It will also invest $7.5 million toward helping the neighborhoods recover from the housing crisis by providing grants for things such as home renovations, down payments, and financial literacy programs. “We agreed that it was in the best interests of everyone involved to work together rather than to continue to be involved in a protracted legal fight,” said Leigh Collier, Wells Fargo regional president for the Mid-South, in a statement Tuesday.



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