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This week, Wells Fargo Bank announced it had settled a lawsuit with the NAACP over its lending practices. However, on the same day, the cities of Memphis and Baltimore announced suits against the bank over what they claim are its predatory lending practices.
According to a Reuters report, Baltimore first sued the bank in 2008, claiming Wells Fargo violated the Fair Housing Act with predatory lending practices. After settlement talks failed, the city filed a new complaint on Wednesday, April 7. The city alleges it was harmed by the bank's discriminatory lending which attorneys claim resulted in unnecessary foreclosures in the city's minority neighborhoods and "have inflicted significant, direct, and continuing financial harm on Baltimore."
Reuters writes the City of Memphis filed an amended Complaint based on the suit it began last December. The Complaint claims there is evidence from former loan officers and branch managers about the bank's alleged "unfair and deceptive" lending practices and uses 50 specific properties to illustrate how Memphis incurs more costs when the bank makes home loans and then forecloses. Baltimore also claims it has lost property tax revenue both from foreclosed homes and from homes whose values fell because of large concentrations of nearby Wells Fargo foreclosures.
The NAACP is pleased with the bank's actions in its own suit. The AP reports that as part of the settlement, the bank will allow the NAACP to review the company's lending practices and will follow the association's principles of lending which "ensure all borrowers get the highest quality credit vehicle appropriate for their circumstances and that guard against racial discrimination in lending."
Reuters reports that fourteen other lenders are still being sued by the NAACP, including Citigroup Inc, HSBC Holdings Plc. and JPMorgan Chase & Co. NAACP President Benjamin Todd Jealous said in a statement said the group's litigation is designed to change mortgage lenders' behavior, rather than seek monetary damages.
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