Settlement Resolves Lending Discrimination Lawsuit
Support Targets Low- and Moderate-Income Homebuyers
Los Angeles Among 50 Eligible Markets Nationwide
Wells Fargo will launch a $100 million mortgage assistance program for low- and moderate-income homebuyers as part of a legal settlement tied to allegations of discriminatory lending and hiring practices.
A federal court in California approved the final settlement on May 15 in a shareholder lawsuit filed against Wells Fargo’s board of directors. The lawsuit alleged that the board failed over the past four years to properly oversee the bank’s lending practices.
Although Wells Fargo denied wrongdoing as part of the agreement, the bank committed to creating a $100 million loan assistance program over the next three years targeting communities that face barriers to mortgage access. The settlement also requires the bank’s directors to pay shareholders $10 million.
Trina Thompson, who oversaw the case, described the program as “a meaningful step toward expanding equitable access to financial services.” She added that the initiative could signal a move toward more inclusive lending practices for communities historically underserved by traditional banking systems.
The plaintiffs alleged that Wells Fargo allowed discriminatory lending practices and algorithms that disadvantaged minority applicants. The lawsuit also cited a Bloomberg analysis showing that Wells Fargo was the only major bank in 2020 to reject more refinancing applications from Black homeowners than it approved.
The new initiative will include mortgage assistance and closing-cost support for low- and middle-income homebuyers. Eligible markets include major California cities such as Los Angeles, San Diego, San Francisco, San Jose, and Sacramento, along with dozens of other communities nationwide.
