Image

6:56 AM / Thursday February 13, 2025

3 Jun 2012

Wells Fargo reaches deal in Memphis bias suit, to pay $7.5M

  • Facebook
  • Twitter
June 3, 2012 Category: Week In Review Posted by:

americanbanker.com

 

NEW YORK — Wells Fargo & Co. (WFC) said Tuesday it will pay $7.5 million to the city of Memphis and Shelby County, Tenn., and the city and county have agreed to drop a foreclosure-related lawsuit against the nation’s largest mortgage lender.

 

The payment will be used to aid homeowners and the local economy.

 

The San Francisco company said it will provide Memphis and Shelby County with $4.5 million in grants for mortgage down payments and home renovations for applicants whose incomes meet certain thresholds. Wells Fargo will also supply $3 million to improve the local economy and fund financial-literacy programs. The bank also said it aims to make $425 million in mortgages there over five years.

 

“The condition of the local housing market continues to challenge Memphis and Shelby County significantly, as unoccupied homes and excessive housing inventory weigh heavily on communities,” Memphis Mayor A.C. Wharton Jr. said in a press release.

 

Shelby County Mayor Mark Luttrell said, “we’re glad that Wells Fargo decided to engage in a dialogue that led to this collaboration.”

 

The bank has been under fire for years, as borrowers complained about discrimination and botched foreclosures. In November, an Illinois state court judge ruled the state can move forward with a lawsuit alleging that Wells Fargo steered minority borrowers into risky mortgages at the height of the housing bubble.

 

Government agencies are investigating mortgage-lending practices at Wells Fargo, including potential violations of fair-lending laws, the bank disclosed in its quarterly earnings filing with the Securities and Exchange Commission. The Department of Justice believes “it can bring claims against Wells Fargo for monetary damages and civil penalties under fair lending laws,” the bank said, but it added it believes “such claims should not be brought.”

 

In 2010, the city of Memphis and Shelby County sued Wells Fargo in federal court in Tennessee for unspecified damages, claiming the bank foreclosed in predominantly African-American neighborhoods much more often than in white neighborhoods. “Wells Fargo’s disproportionately high foreclosure rate in Memphis’ and Shelby County’s African-American neighborhoods is the result of reverse redlining,” the plaintiffs alleged.

 

Wells Fargo denies the allegation.

 

Leigh Collier, Wells Fargo regional president for the Mid-South, said in a press release the bank “agreed that it was in the best interests of everyone involved to work together rather than to continue to be involved in a protracted legal fight.”

  • Facebook
  • Twitter

Leave a Comment

Recent News

Color Of Money

Pennsylvania governor seeks more money for schools and transit, but relies heavily on surplus cash

February 10, 2025

Share Tweet Email Governor Josh Shapiro presents his 2025-26 budget proposal to the Pa. General Assembly, as...

Seniors

How Type 2 inflammation contributes to asthma, COPD, and allergic conditions

February 3, 2025

Share Tweet Email BPT Do you live with persistent, moderate-to-severe asthma, COPD, allergies, eczema or hives? Inflammation...

SUNrise

cj speaks…Celebrating in forgiveness for Black History Month

February 10, 2025

Share Tweet Email By cj “This is the day the Lord has made; we will rejoice and...

Week In Review

Black History Month explained: Its origins, celebrations and myths

February 10, 2025

Share Tweet Email This undated photo provided by the Association for the Study of African American Life...

Commentary

Commentary: The Retirement Party

January 19, 2025

Share Tweet Email President Joe Biden speaks about student loan debt at Madison College, April 8, 2024,...

Health

What you need to know about glaucoma

February 10, 2025

Share Tweet Email FAMILY FEATURES More than 4.2 million Americans live with glaucoma, a leading cause of...

The Philadelphia Sunday Sun Staff