Wells Fargo Accused of Bias
As appeared in the Associated Press, August 14, 2005. A similar article appeared in the Los Angeles Times, August 9, 2005.
Fees, interest target of lawsuit
August 14, 2005
LOS ANGELES – A lawsuit claims that Wells Fargo & Co. discriminated against borrowers in Latino and black areas by charging them higher mortgage fees and interest rates than it charged people with similar credit ratings in adjacent neighborhoods.
According to the Los Angeles Superior Court lawsuit, a computer program would show loan officers how to save borrowers in more affluent areas $500 to $10,000 per loan in fees and cut their interest rates. But, the lawsuit claims, a Wells Fargo manager wouldn’t allow loan officers in more than 30 Los Angeles-area minority branches to use the program.
“It is our belief that Wells Fargo thought minority borrowers were less savvy than nonminority borrowers and would not question excessive fees and charges,” said Jeffrey Fleitman of Beverly Hills, one of the lawyers who filed the suit.
Wells Fargo, which is the largest California-based bank, denied the allegations.
The company in a statement said its fees and rates were based on “risk, not race, and we market to individual customers, not neighborhoods.” It also said it doesn’t tolerate discrimination and knows its growth depends on serving a range of customers with varying credit scores.
The complaint alleges that Wells Fargo violated consumer-protection and civil rights laws. It asks that the lender be ordered to reimburse thousands of people for the alleged overcharges.
Wells Fargo Bank and its Wells Fargo Home Mortgage subsidiary are named as defendants. Wells Fargo Financial, a nonbank subsidiary of Wells Fargo & Co., is not named.
New York Attorney General Eliot Spitzer is probing the lending records of Wells Fargo and several other national banks to determine whether they give white customers better deals than minorities with similar credit histories.
The banks argue that Spitzer has no authority over them.
Class Action Law Suit (Employment Law, Wage and Hour):
Failure to pay overtime