The lawsuit claims that the bank discriminated against minority borrowers
A lawsuit alleging that Wells Fargo discriminated in its mortgage lending has been put on hold
The lawsuit was filed last year by the city of Philadelphia. The city alleged that Wells Fargo discriminated against minorities in its lending practices, causing high foreclosure rates in minority neighborhoods and lowering the city’s tax revenues as a result. According to the lawsuit, the lending giant issued more than 1,000 high-cost or high-risk loans to minority borrowers.
Last week, US District Judge Anita Brody stayed the suit pending mediation. The city of Philadelphia and Wells Fargo will begin trying to reach an out-of-court settlement next month, according to Yahoo News.
Philadelphia isn’t the only municipality to accuse the lending giant of mortgage discrimination. Similar complaints have been made by the cities of Baltimore and Memphis.
The discrimination claims are among a parade of scandals that have plagued the bank since 2016. In September of that year, Wells Fargo was revealed to have opened millions of customer accounts without those customers’ knowledge or consent. The bank has also been caught charging improper rate-lock fees to mortgage holders and charging hundreds of thousands of customers for unnecessary car insurance.
The bank’s numerous scandals prompted the Federal Reserve to place a cap on its assets – a cap Fed Chairman Jerome Powell recently said would stay in effect until Wells Fargo submits a plan to curb its abuses.