Consumer

San Francisco-Based Wells Fargo To Pay Millions In Discrimination Settlement

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A cable car passes by Wells Fargo bank branch in San Francisco, California.  ( Justin Sullivan/Getty Images)

A cable car passes by Wells Fargo bank branch in San Francisco, California. ( Justin Sullivan/Getty Images)

DougSovern20100908_KCBS_0208r Doug Sovern
Doug began his career as a copy boy at the New York Times, and then...
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SAN FRANCISCO (KCBS) – Well Fargo & Co., which is based in San Francisco, will pay the second largest housing discrimination settlement ever, giving millions to qualified African Americans and Latinos to help them buy homes.

It was just last year when Bank of America paid a third of a billion dollars in a similar case. Now, Wells Fargo, the nation’s largest mortgage lender, has agreed to pay $175 million, after the company was accused of making minority borrowers with perfectly good credit pay more, simply because of the color of their skin.

KCBS’ Doug Sovern Reports:

“They would charge what they call discretionary fees. So they would create add-on fees,” said University of San Francisco law professor Tim Iglesias. “What else they would do is steer people into subprime risky and more expensive subprime loans when they would actually qualify for regular loans.”

Iglesias, who specializes in housing discrimination law, said there were suspicions all along about mortgage policies at Wells Fargo.

The company has admitted no wrongdoing, but will give $50 million in direct down payment assistance to thousands of minority mortgage customers.

The U.S. Department of Justice said 34,000 borrowers in 36 states and the District of Colombia were ripped off because of the bank’s discriminatory lending policies.

(Copyright 2012 by CBS San Francisco. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)

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