WELLS FARGO DISCRIMINATION “SETTLEMENT” WON’T RESOLVE FORECLOSURE CRISIS
Largest loan originator admits no responsibility for massive racism in housing industry
Another consent order has been issued by the Department of Justice this time with Wells Fargo & Company, the largest loan originator in the United States. The decree signed by officials from both the Attorney General’s office and the bank, admits no wrongdoing on the part of this financial institution despite the devastation it caused through predatory lending.
The announced “settlement” of $175 million is misleading because at least $50 million is slated to go toward loan assistance programs that target people within African American and Latina/os communities, who the DOJ says were the victims of excessive fees. The remaining $125 million appears to be set aside for people who can prove that they were charged additional bank fees because they belonged to oppressed groups.
Nowhere in the consent order does it call for a halt or moratorium on foreclosing homes where Wells Fargo has been involved in discriminatory loan practices. In other words, the home seizures will continue even though some may be eligible for monetary “damages.”
The fact that Wells Fargo maintained that it does not engage in discrimination, speaks volume in regard to the character of the bank. In the legal documents signed, the bank said that it agreed to the consent order “solely for the purpose of avoiding contested litigation” with the DOJ.
According to Reuters “A government investigation found 34,000 instances of Wells Fargo charging African Americans and Hispanics higher fees and rates on mortgages compared with white borrowers with similar credit profiles…. In 4,000 of those cases, minority borrowers were steered into subprime mortgages even though they qualified for cheaper loans.” (Reuters, July 12)
The consent order only covers mortgages written between 2004-2009. Those people who were victimized before and after these dates will not be eligible for assistance.
This settlement comes in the aftermath of a similar legal decision involving Bank of America, and other institutions which was said to have been valued at $335 million. This agreement that was signed during the Winter, does not stop foreclosures either.
This settlement needs approval by a judge. In all likelihood this consent order will be trumpeted in the corporate media as a victory for African Americans and Latina/os.
Under the consent order other claims made against Wells Fargo will be considered settled. This includes a 2009 suit initiated by the State of Illinois on behalf of borrowers and an investigative complaint filed by the Pennsylvania Human Relations Commission.
Also another lawsuit filed by the City of Baltimore in 2008 alleging that Wells Fargo engages in the intentional targeting of oppressed communities in issuing predatory loans, will be settled under this agreement. The bank ostensibly reached an agreement over predatory lending in Memphis during May involving the same practice of targeting oppressed communities in what is called “reverse redlining.”
“Redlining” refers to the denial of loans or the punitive fees placed on African Americans and Latina/os in dealing with banks. The practice is widespread within the banking and insurance sectors of the U.S. economy.
Moratorium on Foreclosures Needed
Both the consent orders between the federal government and Wells Fargo as well as the earlier agreement signed by Bank of America, Chase and other institutions, will not stop the epidemic of foreclosures and evictions. What is needed is a federal moratorium on foreclosures to stop all home seizures by the banks and the government-controlled Fannie Mae and Freddie Mac agencies.
With the existence of widespread fraud and racial discrimination in the mortgage industry, the only method of providing relief to home owners would be a moratorium. The halt to the seizures and evictions would provide the federal government time to sort out the massive fraud and to hold those involved financially and legally responsible.
Offering a few thousand dollars to families and individuals who have been denied fair treatment and due process is insulting. Those who have been put into foreclosure or who have already lost their homes, will not receive justice from this consent order.
In addition, the loss of homes, disposable income, tax revenues, property values and the overall devastation of urban communities can in no way be addressed with $175 million spread across numerous municipalities throughout the country. For working people, their homes were the only real wealth they possessed and therefore, the seizure of their real estate is tantamount to complete economic disenfranchisement.
President Obama through an executive order could easily place a moratorium on all foreclosures throughout the U.S. Most loans since the 2007-2008 economic crisis have been underwritten and assumed by the federal government through Fannie Mae and Freddie Mac.
Consequently, it is the tax dollars of the working class and oppressed inside the U.S. that is subsidizing foreclosures and evictions. As a result of this fact, the federal government has the responsibility of providing relief with immediate effect to stop this financial theft impacting millions throughout the country.
Abayomi Azikiwe is the editor of Pan-African News Wire , an international electronic press service designed to foster intelligent discussion on the affairs of African people throughout the continent and the world. The press agency was founded in January of 1998 and has published thousands of articles and dispatches in newspapers, magazines, journals, research reports, blogs and websites throughout the world. The PANW represents the only daily international news source on pan-african and global affairs. To contact him, click on this link >> Email
OTHER ARTICLES BY THE AUTHOR ON LIBYA 360°
THE JACKSON PLAN: SELF-DETERMINATION, PARTICIPATORY DEMOCRACY, ECONOMIC JUSTICE IN THE USA