Suit launched against bank

by Justin da Rosa24 Sep 2015
The city of Oakland is suing Wells Fargo for allegedly offering predatory mortgages to minority clients.

According to court documents, the country’s largest mortgage lender influenced minorities to take on pricy loans that the city alleges led to foreclosures and abandoned properties.

“While Wells purports to be a good corporate and community citizen, the reality is exactly the opposite,” city officials wrote in the suit, according to a local CBS report. “The Bank was putting its financial interests ahead of its customers and the City of Oakland in order to maximize profits.”

The suit claims a number of former Wells Fargo employees are acting as confidential witnesses.

According to CBS, one of those employees claims the bank targeted minorities by offering inferior mortgage terms, despite the fact they qualified for better conditions.

The bank, unsurprisingly, is defending its practices.

“The City Attorney’s accusations against Wells Fargo do not reflect how we operate in the communities where we do business and it’s disappointing that she has chosen this course of action over a collaborative approach to helping borrowers and home owners in Oakland,” Wells Fargo spokesman Ruben Pulido said.

Similar suits against the big banks have already been dismissed.

Still, cities have been steadfast in respective bids to hold banks accountable for their contributions to the economic downturn.

Recently, New York’s Attorney General argues one bank participated in “redlining” mortgages, an illegal lending tactic that denies mortgages based on the racial makeup of communities.

“It is essential that all New Yorkers, regardless of the color of their skin or the racial make-up of their neighborhoods, be afforded equal access to our banking systems – and the basic benefits of obtaining a mortgage," Attorney General Eric Schneiderman recently told a local Buffalo publication.

Evans Bank has agreed to pay $825,000 in a settlement to a number of borrowers in a Buffalo neighbourhood.


Should CFPB have more supervision over credit agencies?