Lisa Simpson
Apr 15,2010
In: Finance

New Legal Suits have been Filed by Baltimore and Memphis Against Wells Fargo renewing charges of racist Borrowing

New legal suits have been filed by Baltimore and Memphis against Wells Fargo.

New legal suits have been filed by Baltimore and Memphis against Wells Fargo renewing charges of racist borrowing. It is alleged that the bank intentionally navigated the Blacks into toxic loans that led to foreclosures. This has resulted in the cities losing out on revenue. Moreover it has to spend extra amounts to see to public safety. The suits were filed on Wednesday 7th April.

On that same day Wells Fargo agreed to settle a lawsuit with National Association for the Advancement of Colored People. This suit made the same allegation of the bank peddling sub-prime mortgage to the Blacks in greater numbers than the Whites. In the settlement Wells Fargo will permit the civil rights organization to review the lending practices of the bank.

A spokesperson of Wells Fargo Oscar Suris said, “We stand by our fair and responsible lending practices. We believe we can accomplish more for homeowners through working with communities than having to respond to litigation. It is our hope that Baltimore and Memphis make that same choice soon.”
NAACP is continuing with suing other than Wells Fargo, fourteen different lenders including some big names like Citigroup, HSBC Holdings, JPMorgan Chase etc.
Wells Fargo is based in San Francisco. It is the largest mortgage lender in America and the fourth biggest bank as regards assets. In Baltimore and Memphis there are over 600,000 residents. Two thirds of them are Blacks according to census reports.

Wells Fargo was sued first by Baltimore in 2008 – the case being the first instance of a city bringing charges against a mortgage provider for transgressing Fair Housing Act by indulging in predatory lending that has ultimately led up to the tsunami of the housing crisis. In the recent complaint running into 107 pages Baltimore City said, “Wells Fargo’s discriminatory practices and the resulting unnecessary foreclosures in the city’s minority neighborhoods, have inflicted significant, direct and continuing financial harm on Baltimore.”

The solicitor of Baltimore City George Nilson said, “I don’t doubt that the people we talk to at Wells believe they behave extraordinarily well these days. I have a sense they really want to do better, but we are just not prepared to say “forget about what happened before’”.
More or less the same charges were made in the suit filed by Memphis referring to violation of FHA. The complaint ran into 83 pages and said in addition that Wells Fargo had transgressed the consumer protection law of Tennessee.