Archives For Predatory Lending

An amicus brief has been filed today in support of a lawsuit brought by the City of Oakland against Wells Fargo. The City alleges that the bank engaged in predatory mortgage lending targeting minority communities.

The brief urged the court to affirm the district court’s denial of Wells Fargo’s motion to dismiss the lawsuit and highlighted the harmful effects of discriminatory lending practices in California.

In 2015, the City of Oakland filed a lawsuit alleging that, in violation of the federal Fair Housing Act and the California Fair Employment and Housing Act, Wells Fargo harmed the city through a pattern of illegal and discriminatory mortgage lending, heavily impacting minority community members. In particular, Oakland alleged that Wells Fargo steered minority borrowers there to loans with higher costs and risks, and refused to allow those borrowers to refinance, or would only refinance on less favorable terms compared to other similar loans, when they were no longer able to meet the terms of their original agreements. According to the first amended complaint, African-American and Latino borrowers were more than twice as likely to receive a high-cost or high-risk loan from Wells Fargo than similarly situated white customers. As a result, the city alleged, among other things, that these discriminatory practices suppressed property values in minority communities in Oakland, reduced property tax revenues, and increased the costs of providing municipal services. Wells Fargo’s motion to dismiss the case was largely denied and the bank is currently seeking review before the U.S. Court of Appeals for the Ninth Circuit.

California Attorney General Xavier Becerra made the announcement.

Equal access to housing starts with equal and fair access to our financial institutions,” said Attorney General Becerra. “For many African-Americans and Latinos, the hardships of the mortgage crisis haven’t stopped. Our fight for economic justice continues and I’m proud to stand with the City of Oakland in this effort to combat predatory lending in our state.”

Wells Fargo’s racially discriminatory mortgage lending practices against African-Americans and Hispanics have devastated individuals, families, and communities in Oakland, throughout California, and across the country where Wells Fargo operates, dramatically increasing foreclosures and decreasing the Black and Latino middle class,” said Oakland City Attorney Barbara J. Parker. “Evidence shows that Wells Fargo systematically provided more expensive and higher risk loans to African-American and Hispanic borrowers in Oakland and other cities who qualified for the more favorable loans that the bank offered to white borrowers. We applaud Attorney General Becerra for standing with Oakland to hold Wells Fargo accountable and stop these racially discriminatory practices.”

Attorney General Becerra is committed to tackling housing inequity in the state and throughout the country. In March and October of 2018, the California Department of Justice submitted Attorney General Becerra is committed to tackling housing inequity in the state and throughout the country. In March and October of 2018, the California Department of Justice submitted comments opposing changes proposed by the Trump Administration that would revoke key tools used to overcome entrenched patterns of residential segregation and foster inclusive communities. In July of 2019, Attorney General Becerra urged the U.S. Department of Housing and Urban Development to withdraw a proposed rule on housing assistance eligibility, which would risk eviction for tens of thousands of Californians. Attorney General Becerra also joined a coalition of attorneys general seeking to protect federal rules allowing equal and consistent access to shelters for transgender and gender nonconforming individuals.

A copy of the brief is available here.