Wells Fargo Accused Of Racism

Wells Fargo & Co. (WFC) was accused of steering blacks and Latinos into high-cost sub-prime loans through illegal sales practices by Illinois Attorney General Lisa Madigan in a suit filed on Friday.

The lawsuit resulted from an investigation into possible violations of fair-lending and consumer-fraud laws. By resorting to discriminatory and illegal mortgage lending practices, the company allegedly misled borrowers in the state about loan-mortgage terms, misrepresented the benefits of refinancing, repeatedly refinanced loans and used deceptive mailing and marketing tools to bewilder borrowers. On the other hand, white borrowers with similar incomes received lower-cost loans with more favorable terms from Wells Fargo.

The class-action suit asked the court to rescind all unfair contracts and grant full restitution to affected consumers. It also asked the court to impose civil penalties for violations.

Wells Fargo is the fourth-largest (in terms of assets) financial services company in the U.S. with $1.3 trillion in assets and nearly $800 million in deposits, providing retail and wholesale banking, mortgage banking, consumer finance, equipment leasing, insurance brokerage, agricultural finance, securities brokerage, trust, investment banking, and other financial services.

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