The banking giant Wells Fargo Bank has agreed to pay a settlement of at least $175 million for discriminating against African-American and Hispanic borrowers. The Justice Department says Well Fargo routinely carried out misleading lending practices to minority communities from 2004 through 2009, saddling them with subprime loans and pushing many into foreclosure. All told, Wells Fargo’s practices are said to have led to higher rates for 34,000 African-American and Hispanic borrowers in 36 states and the District of Columbia, solely because of their ethnicity. On Thursday, Deputy U.S. Attorney General James Cole said the settlement would bring relief to Wells Fargo’s victims.
James Cole: “With today’s settlement, the federal government will ensure that African-American and Hispanic borrowers who are discriminated against will be entitled to compensation, and borrowers and communities hit hard by this housing crisis will have the opportunity to access home ownership.”
Under the settlement terms, Wells Fargo will pay $125 million in compensation to borrowers and another $50 million in direct down-payment aid in parts of the country where rampant discrimination was found. In striking the deal, Wells Fargo refused to admit to any wrongdoing but said it wanted to settle the case to avoid a lengthy legal dispute.