Seems like only yesterday Wells Fargo was settling with the U.S. Department of Justice (DOJ) over accusations of predatory loan policies that discriminated against the poor and people of color in Oakland and other cities during the housing bubble-bust years beginning in 2006.
But it was four years ago. San Francisco-based Wells Fargo admitted no guilt, but agreed to pay $175 million after its independent brokers allegedly charged 30,000 minority borrowers in eight metropolitan areas higher fees and rates than white people with comparable credit scores. They also allegedly steered 4,000 minority borrowers into dangerous, high-cost subprime loans that white people didn’t receive between 2004 and 2009.
The New York Times said pending lawsuits from Baltimore, Illinois, Pennsylvania Human Rights Commission and the like were wrapped into the Wells Fargo settlement, “putting to rest its fair-lending cases from the bubble years.”
The city of Oakland sued Wells Fargo this week in federal court, accusing the bank of predatory lending and discrimination, dating back to the bubble, in violation of the Fair Housing Act and California's Fair Employment and Housing Act. The city said the deplorable lending practices never stopped.
Oakland wants to be compensated for the lost tax revenue during the ensuing recession, which devastated city services. Thousands of homes were thrown into foreclosure and many remain in disrepair. Wells Fargo has 108 branches in or near Oakland.
The 2012 Times story pointed out that the DOJ settlement covered independent brokers, but the bank and government lawyers couldn’t agree on whether the in-house retail mortgage agents were culpable, too. “Instead, they agreed to a methodology to evaluate that data further.”
Reuters, Oakland Tribune and the San Francisco Business Times didn’t mention the 2012 settlement in their coverage of the Oakland lawsuit.
Reuters said the new lawsuit is a sign that cities aren’t done suing for their housing practices dating back a decade. Some of the municipal lawsuits have been dismissed, they said, but a federal appeals court in Florida breathed new life into three lawsuits against Wells Fargo and two other banks claiming violations of the U.S. Fair Housing Act.
Wells Fargo spokesman Ruben Pulido told the Tribune, “Wells Fargo has been a part of the Oakland community for more than 140 years and we will vigorously defend our record as a fair and responsible lender.”