A federal probe has been launched into Wells Fargo’s activities regarding their treatment of minority lenders and their handling of properties in minority neighborhoods. This is the second such probe into Wells Fargo, the first of which ended in a fine of $85 million.
The specific accusations against the bank say that they were intentionally trying to get minority borrowers to secure higher interest loans, even when they qualified for better interest rates. Also, homes that Wells Fargo owned and were trying to sell in minority neighborhoods were found to be neglected. Compared to homes in mostly white neighborhoods, those in minority areas were in a worse state of repair. There was also a discrepancy in for sale signs, with white areas having professional signs and minority neighborhoods often having nothing more than a piece of cardboard with ‘for sale’ written across it.
These practices show contempt for minorities and exacerbate the problems that are occurring due to mass foreclosures. The banks have a harder time selling these properties due to their neglect, but more importantly it causes the overall property values in these neighborhoods to drop due to run down housing that remains consistently unsold.
Wells Fargo’s response to the allegations, in typical fashion, was to deny everything. They claimed that they were putting equal work into every property and not basing their judgments on the locations of the houses. The evidence, however, seems to suggest otherwise.
These cases of banks abusing their power are intolerable. Minorities are targeted because the banks think they can get away with more when dealing with them. This is but one more example of how little banks actually care about customers they perceive as not being worthy of investment. Thank you Wells Fargo, for showing your true colors once again and letting us all know that it’s money that drives your business, not people.