California’s top cop takes legal action against Wells Fargo, alleging the bank engaged in predatory mortgages.
Attorney General Xavier Becerra announced Thursday that he has filed an amicus brief in support of Oakland’s lawsuit against the company, which accuses Wells Fargo of steering minority borrowers towards higher risk loans and at a higher cost than white borrowers.
“Equal access to housing begins with equal and equitable access to our financial institutions,” Becerra said in a statement. “For many African Americans and Latinos, the ordeals of the mortgage crisis have not ceased. Our fight for economic justice continues and I am proud to support the City of Oakland in this effort to tackle predatory lending in our state.
The case is before the United States Court of Appeals for the Ninth Circuit, where Wells Fargo wants a judge to dismiss the lawsuit. The bank says it has been a fair lender and does not discriminate.
Originally filed by Oakland in 2015, the lawsuit alleges Wells Fargo violated the federal Fair Housing Act and the California Fair Employment and Housing Act and harmed the city by directing minority borrowers to risky loans and refusing to allow many of them to refinance. Black and Latino borrowers, according to the lawsuit, were more than twice as likely to receive a bad credit loans as similar customers. Such practices, according to Oakland, undermine property values in minority communities, limit property tax revenues and increase the costs of providing municipal services.
“Wells Fargo’s racially discriminatory mortgage lending practices against African Americans and Hispanics have devastated individuals, families and communities in Oakland, across California and across the country where Wells Fargo operates, dramatically increasing foreclosures and shrinking the black and Latino middle class, ”Oakland City lawyer Barbara Parker said in a statement.
“Evidence shows that Wells Fargo consistently provided more expensive and riskier loans to African American and Hispanic borrowers in Oakland and other cities who qualified for the more favorable loans the bank offered to white borrowers,” he said. Parker continued. “We applaud Attorney General Becerra for supporting Oakland in holding Wells Fargo accountable and ending these racist practices.”
In the amicus brief, Becerra argued that the bank’s practices leave minority communities particularly vulnerable to foreclosures, which can have reverberating effects, increased homelessness and deteriorating health. physical and mental borrowers stressed with deteriorating schools.
The bank denied the charges.
“We continue to disagree with the city’s accusations in this appeal and we stand ready to make a strong case in support of our long history of fair and responsible lending in Oakland and across the country,” said Thursday the spokesperson of the company Ruben Pulido in an e-mail.
“Wells Fargo has been a part of the Oakland community for over 140 years and will continue its long-standing efforts to work with clients, credit counselors, nonprofits and government agencies to develop home ownership. property and revitalize distressed neighborhoods. We will continue to focus on the financial success of our clients and on expanding homeownership in California and the United States. ”