Monday, June 8, 2009

Wells Fargo now accused of racist loan policies

Posted By on Mon, Jun 8, 2009 at 12:50 PM

Wells Fargo, which devoured former Charlotte corpo-powerhouse Wachovia, is being sued by the city of Baltimore for racist loan policies that have, according to the city, caused hundreds of foreclosures and cost the area tens of millions of dollars in taxes and city services. According to the New York Times, a group of Wells Fargo loan officers say they were told to engage in "reverse redlining," in which they systematically picked out blacks in Baltimore and its suburbs for high-interest subprime loans — even to the point of pushing customers who qualified for prime loans into subprime mortgages. One loan officer said Wells Fargo employees routinely referred to blacks in racist ways behind their backs and called subprime loans "ghetto loans." This latest Wells Fargo lawsuit comes on the heels of three company subsidiaries being sued by the state of California for securities fraud that the state says bilked customers out of $1.5 billion. A few years ago, Wachovia was accused of "regular" redlining, i.e., not giving loans to anyone in predominantly black areas of cities. It's good to see that the company's new overlords have turned things around 180 degrees. Yes, that last sentence was sarcasm.

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