Wells Fargo to pay $175 million to minority borrowers

The Obama administration is serious about making predatory lenders accountable for their discriminatory lending practices. A settlement was reached on July 17, 2012 for Wells Fargo to pay $175 million in compensation to borrowers who paid higher fees and rates than White borrowers strictly because of their color or ethnicity. At a news conference on July 13, Deputy Attorney General James Cole stated that Wells Fargo charged high rates for mortgages and loans to more than 34,000 African-American and Hispanic borrowers in 36 states and the District of Columbia.

Last year, Bank of America agreed to pay $335 million for similar practices, making this settlement the second largest predatory banking settlement in the history of finance. Reuters reports, “Wells Fargo said it was innocent, but opted not to fight the case.”