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Miami, Philadelphia Sue Wells Fargo for Redlining Discriminatory Lending

The largest portion of most Americans wealth is their home. There is a huge “wealth gap” between white Americans and black. No small part of this wealth gap is due to predatory lending, and racial discrimination in loan origination. By refusing loans to black folks and other minorities in certain geographic areas, the bank assures that they can only buy less desirable, and thus less likely to rise in value properties.  So Joe the white guy gets a loan in a fast growing section of the city where property values are rising at 20% a year. Theodore, the black homeowner is limited to buying properties in older sections which are only rising in value a 1-3% a year. Joe winds up with a lot more money in 10 years – because the bank won’t loan to Theodore and defacto segregates the city.

Philadelphia sues Wells Fargo for allegedly discriminating against minority borrowers

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The city of Philadelphia sued Wells Fargo on Monday for allegedly discriminating against minority home buyers.

The complaint filed in a federal court in Pennsylvania alleges that Wells Fargo violated the Fair Housing Act of 1968 by “steering” minority borrowers into mortgages that were more expensive and riskier than those offered to white borrowers, according to court documents.

The lawsuit says that Wells Fargo is among the major banks with a “history of redlining” in Philadelphia, a practice traced back to the 1930s that involves denying credit to borrowers in certain communities because of their race or ethnicity.

The complaint says that between 2004 and 2014, African American borrowers were twice as likely to receive high-cost loans when compared to white borrowers with similar credit backgrounds. Latino borrowers were 1.7 times as likely to receive costly loans when compared to white borrowers, the lawsuit claims.

“The city’s unsubstantiated accusations against Wells Fargo do not reflect how we operate in Philadelphia and all of the communities we serve,” Wells Fargo Image result for wells fargo redliningspokesman Tom Goyda said in a statement. “Wells Fargo has been a part of the Philadelphia community for more than 140 years and we will vigorously defend our record as a fair and responsible lender.”

The filing comes as the bank is still recovering from a sales scandal in which bank employees opened millions of unauthorized accounts in customers’ names. The complaint draws parallels between the alleged predatory lending and the problematic sales targets by saying there was a lack of “internal controls” that could have prevented both issues.

Many borrowers were also rejected later when they applied for credit that would have allowed them to refinance those more expensive loans, according to the complaint. As a result, minority borrowers faced higher rates of foreclosure — a pattern that also hurt the city by leading to lower property taxes and more frequent incidents of vandalism and crime, the lawsuit claims.

Monday’s lawsuit comes just two weeks after the U.S. Supreme Court ruled that cities have standing to sue banks for predatory lending practices, on the grounds that the cities can also incur financial damages, such as reduced tax revenue.

In that case Miami sued Bank of America and Wells Fargo, arguing that discriminatory lending practices led to higher rates of default for minority borrowers. Miami, which was represented by the same lawyers handling the Philadelphia case, claimed that the banks in turn caused financial harm to the city by leading to lower property taxes and requiring the city to provide services to struggling borrowers.

While the Philadelphia investigation has been underway for more than a year, the city waited until after the Supreme Court ruling to ensure that it would have legal standing to sue, said Benjamin Field, deputy city solicitor for Philadelphia, in an interview.

News of the Philadelphia lawsuit against Wells Fargo was first reported by Reuters.

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“Hiawatha” Goes to War

The reason Republicans despise Elizabeth Warren (and thus the “Hiawatha” jab) is she is effective at demanding accountability for the biggest thieves, liars, and crooks in the country. Wll Street, and heads of the major banks.

Here – she lights a fire under Wells Fargo President Stumph for crooked dealing, and profiteering.

I hope like hell for a change, the DOJ prosecutes and sends this sucker to jail where he belongs. Folks are getting real tired of this “special justice” for “special people.” crap.

 

 
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Posted by on September 20, 2016 in American Greed

 

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More Massive Corruption at Wells Fargo Bank

I have said here that Wells Fargo is the most corrupt bank in America. They paid $1.2 billion a few years ago, then the largest fine ever levied on a financial institution for their part in the Mortgage scams leading up to the Great Depression of 2009. IN 2013 the Bank was forced to pay $203 million in restitution and penalties for fake overdraft fees in Gutierrez vs. Wells Fargo. In 2012, the Justice Department ( Justice Dept. vs.Wells Fargo) the court reached a verdict based on Discrimination against African-American and Hispanic borrowers who were steered into high-cost, subprime mortgages. $175 million to be paid to the victims – 34,000 black and Hispanic Mortgage holders.

Here they are again paying a record fine for screwing the customers again…

Supposedly the company has terminated 5,300 employees as part of an internal review. How much you want to bet not a single one of them is one of the crooks at the top?

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Wells Fargo making a get away after a robbery…

 

Wells Fargo Fined $185 Million Over Creation Of Fake Accounts For Bonuses

Wells Fargo Bank has been ordered to pay $185 million in fines and penalties to settle what the Consumer Financial Protection Bureau calls “the widespread illegal practice of secretly opening unauthorized deposit and credit card accounts.”

Thousands of Wells Fargo employees opened the accounts in secret so they would get bonuses for hitting their sales targets, according to investigators. More than 2 million deposit and credit card accounts may have been created without customer authorization.

The bank must pay $100 million to the CFPB — the largest fine ever levied by the federal consumer watchdog. It also will pay $50 million to the City and County of Los Angeles, along with a $35 million penalty to the Office of the Comptroller of the Currency.

It’s also on the hook to pay full restitution to all victims of the scheme.

“Because of the severity of these violations, Wells Fargo is paying the largest penalty the CFPB has ever imposed,” said CFPB Director Richard Cordray. “Today’s action should serve notice to the entire industry that financial incentive programs, if not monitored carefully, carry serious risks that can have serious legal consequences.”

The CFPB’s consent order says the bank has already terminated 5,300 employees as part of an internal review.

Wells Fargo said in a statement that it has fired managers and employees “who acted counter to our values” in carrying out the schemes. It also refunded $2.6 million in fees it collected from customers. The bank said that “accounts refunded represented a fraction of one percent of the accounts reviewed, and refunds averaged $25.”

In addition, the Sioux Falls, S.D.-based bank says it is taking steps to keep this type of scheme from occurring again, noting that it will now send a customer an email confirmation shortly after a deposit account is opened.

“This is a major victory for consumers,” said Los Angeles City Attorney Mike Feuer, whose office sued Wells Fargo in 2015 after a Los Angeles Times investigation into the fake accounts. “Consumers must be able to trust their banks. They should never be taken advantage of by their banks.”

Feuer’s office says that after the suit was filed, the city attorney received “more than 1,000 phone calls and emails from customers and current and former Wells Fargo employees across the nation about the issues raised in the litigation.”

 

 
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Posted by on September 8, 2016 in American Greed

 

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Highway Robbery

Wells Fargo is the first of several banks to face the wrath of consumers in class action lawsuits resultant of their abuses of fees related to consumer checking accounts. In an influential California case Wells Fargo has been ordered to pay $203 Million in restitution. Other major banks are on the chopping block in a national case. The shady practice of artificially arraigning the sequence of debits to an account to maximize the number and amount of penalties brutalizes consumers on fixed incomes, and consumers already at risk, adding hundreds of dollars a month in penalties to a downward spiral. This really should be treated as a criminal enterprise.

Old Time Highway Robbery, same as the New Highway Robbery... Except It's Now Done By the Bank

Wells Fargo faces larger suit on overdraft fees

San Francisco judge’s scathing ruling ordering Wells Fargo to pay its customers $203 million for manipulating debit transactions to maximize overdraft fees might be just the start of troubles for the bank.

U.S. District Judge William Alsup’s 90-page opinion Tuesday described Wells Fargo’s motive as profiteering and said the San Francisco-based bank’s goal was to “maximize the number of overdrafts and squeeze as much as possible” out of customers.

But the hefty tab represents only what Wells owes its California customers. That figure is far smaller than the potential bill from a separate suit in which Wells’ clients in other states have accused the bank of the same unfair practices.

That case, consolidated in federal court in Miami, includes similar claims against 30 other lending institutions, including Bank of America, Citibank, Chase, Union Bank and U.S. Bank.

The crux of the claims is that the banks processed debit transactions from the largest to the smallest, instead of the order in which they occurred, depleting accounts faster and boosting the number of overdrafts, which cost as much as $35 per transaction.

Wells Fargo garnered more than $1.4 billion in overdraft fees just in California from 2005 to 2007, according to court documents. Nationwide, banks and credit unions collected almost $24 billion in overdraft fees in 2008, according to the Center for Responsible Lending.

Wells Fargo, which continues to follow the “high-low” practice that it has had in place since 1998, said it would appeal Alsup’s decision. Wells representatives declined to forecast what the ruling might mean in the Florida matter, other than to say that the California order was not in line with the facts and that the bank’s transactions have been “consistent with the laws and rules of governing regulatory authorities.”

“We have found that high-low gives priority to larger payments and have found that those are the customers’ priority payments … it gives priority to larger transactions,” said Richele Messick, spokeswoman for Wells Fargo.

Messick said that many transactions are received by the bank in a random order without a time stamp, and therefore, the bank needed to determine an order in which to process them.

 
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Posted by on August 12, 2010 in American Greed

 

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The Subprime Tavis Smiley

Sacramento Observer  – 07-06-2005

Wells Fargo Home Mortgage, the nation’s leading originator of home loans to ethnic minority customers, has joined forces with talk show host and author, Tavis Smiley; and several financial affairs experts to provide free Wealth Building Strategies Seminars in eight cities across the country.

Additional seminars featuring other popular panelists also will be offered in 12 more cities, nationwide.

Tavis Smiley

Tavis Smiley

Wells Fargo is in the center of a lawsuit alleging the bank pushed high-risk mortgages to minorities. Mortgages which disproportionally have failed. According to legal documents and studies, Wells Fargo pushed black applicants into high-risk mortgages, even if their credit scores merited much lower interest rate traditional loans. Loan documents may have been falsified to grant loans to people who otherwise would not have qualified. According tot he Baltimore Sun as reported by TPMRead the rest of this entry »

 
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Posted by on September 18, 2009 in The Post-Racial Life

 

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It Used to Be the Bad Guys Robbed Wells Fargo

On July 21, 1873, Jesse James and the James-Younger Gang robbed their first train in Adair, Iowa, of all places. They managed to derail the Rock Island train, turning the train on its side, killing the engineer and injuring a lot of its passengers. But that wasn’t enough terror for the passengers - the James-Younger Gang, clad in Ku Klux Klan garb, went up and down the length of the overturned train confronting them and demanding their watches and valuables (although some reports say they stole only from the men). They threw it all in bags along with the money from the train’s safe and ended up getting about $3,000.

On July 21, 1873, Jesse James and the James-Younger Gang robbed their first train in Adair, Iowa, of all places. They managed to derail the Rock Island train, turning the train on its side, killing the engineer and injuring a lot of its passengers. But that wasn’t enough terror for the passengers - the James-Younger Gang, clad in Ku Klux Klan garb, went up and down the length of the overturned train confronting them and demanding their watches and valuables (although some reports say they stole only from the men). They threw it all in bags along with the money from the train’s safe and ended up getting about $3,000.

How things changed during the Bushit Hold-up!

Illinois Sues Wells Fargo for Biased Lending

Wells Fargo targeted African-Americans and Latinos for risky, subprime mortgage loans with “reverse redlining” practices, Illinois Attorney General Lisa Madigan says in Cook County Court. The 62-page complaint accuses the bank of a litany of biased and fraudulent practices during the “heyday” of subprime lending.

Madigan says Wells Fargo charged blacks and Latinos much more for mortgages than white borrowers with the same income – and even with lower incomes.

Madigan cites a 2007 story from the “Chicago Reporter” that reported 34 percent of African-American borrowers who earned more than $120,000 received high-cost loans from Wells Fargo, compared to only 22 percent of white borrowers who earned less than $40,000. Read the rest of this entry »

 
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Posted by on August 6, 2009 in American Genocide, The New Jim Crow

 

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