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Eleven U.S. senators sent a letter to federal regulatory officials seeking a review of Wells Fargo Bank N.A. over claims that its mortgage refinancing process during 2020 and 2021 discriminated against minority borrowers.
The letter, dated March 17, is addressed to Secretary Marcia Fudge of the U.S. Department of Housing & Urban Development and Rohit Chopra, director of the Consumer Financial Protection Bureau. It was co-signed by 10 Democrats and one independent member of the Senate: Sen. Sherrod Brown, D-Ohio and chairman of the Senate Committee on Banking, Housing & Urban Affairs; Sen. Richard Durbin, D-Ill.; Sen. Jeff Merkley, D-Ore.; Sen. Jon Ossoff, D-Ga.,; Sen. Alex Padilla, D-Calif.; Sen. Bernie Sanders, I-Vt.; Sen. Tina Smith, D-Minn.; Sen. Mark Warner, D-Va.; Sen. Raphael Warnock, D.-Ga.; Sen. Elizabeth Warren, D-Mass., and Sen. Ron Wyden, D-Ore.
The letter states that while “one large national lender approved 79% of Black refinance applicants (compared to 86% of white applicants), Wells Fargo approved just 47% of Black refinance applicants and 53% of Hispanic refinance applicants, compared to 72% of white applicants.”
The senators cited a Bloomberg News analysis, “Wells Fargo Rejected Half Its Black Applicants in Mortgage Refinancing Boom,” as the source for the Wells Fargo data.
“In light of recent analysis of mortgage lending data, we are writing to request that you review mortgage refinance lending by Wells Fargo for compliance with both the Equal Credit Opportunity Act (ECOA) and the Fair Housing Act,” the letter states. “As the regulators with primary responsibility for enforcing (sic) including ECOA and the Fair Housing Act, you are uniquely suited to review the relevant data and systems for systemic disparities.”
The letter continues, “We therefore request that you thoroughly review Wells Fargo’s mortgage refinance processes during 2020 and 2021 to ensure that all borrowers had an equitable opportunity to benefit from the opportunity to reduce their housing costs and take appropriate action if disparities are found.”
The letter was dated one day after the CFPB announced changes to its “supervisory operations to better protect families and communities from illegal discrimination.” In a news release, the CFPB said it would “scrutinize discriminatory conduct that violates the federal prohibition against unfair practices,” including closely examining “financial institutions’ decision-making in advertising, pricing, and other areas to ensure that companies are appropriately testing for and eliminating illegal discrimination.”
Wells Fargo is the target of several civil lawsuits filed earlier this year claiming racial discrimination in its lending process. The suits seek class action status. At least one of lawsuit also cites the Bloomberg News analysis.
In its report, which was published online on March 11, Bloomberg News said Wells Fargo declined to comment about individual customers, but “didn’t dispute” its statistical findings.
Neither federal agency has commented on the senators’ request.