City Attorney Barbara J. Parker filed a federal lawsuit against Wells Fargo recently to recover damages caused by the Well Fargo’s Banks widespread predatory and discriminatory lending practices.
The lawsuit charges Wells Fargo with targeting African American and Hispanic borrowers, including minority churches and congregations, for predatory mortgage loans in violation of the federal Fair Housing Act and California’s Fair Employment and Housing Act.
Evidence shows that Wells Fargo issued more expensive and higher risk loans to minority borrowers despite the fact that they qualified for more favorable loans that the bank regularly issued to white borrowers, according to the city attorney.
“Wells Fargo’s discriminatory conduct devastated individuals and communities, increasing poverty and wiping out or drastically reducing wealth for minority communities while bankers prospered,” Parker said.
“Wells Fargo and other banks knew when they issued predatory loans that many of them would result in foreclosure,” she said. “None of the responsible bankers have been held personally accountable in any meaningful manner, and the leaders of these institutions earned millions of dollars generated in part by issuing toxic loans to minorities.”
The lawsuit asks the court to order Wells Fargo to cease its discriminatory practices and compensate the City of Oakland for the great financial harm the foreclosure crisis caused the city and its residents.
In addition to losing millions in tax revenues, which necessitated police layoffs and other cuts in vital City services such as park and library services and street and sidewalk maintenance, the bank’s predatory actions saddled the City and its taxpayers with the massive costs of addressing blight, vandalism and crime associated with foreclosed properties.
Thousands of homes went into foreclosure and remain in poor condition costing cities significant sums of money due to the loss of property taxes and increased out-of-pocket expenditures to remedy the resulting blight throughout minority communities.