On July 12, 2012, the U.S. Department of Justice (DOJ) announced that Wells Fargo Bank will pay $175 million to settle allegations that it engaged in discriminatory lending practices. The settlement is the second largest fair lending settlement the DOJ has ever reached.
A DOJ and Office of the Comptroller of the Currency investigation revealed that Wells Fargo’s discriminatory lending resulted in 34,000 African-American and Latino borrowers paying higher rates for loans than white borrowers and 4,000 African-American and Latino borrowers being steered into subprime mortgages.
The bank issued a statement claiming that it was settling the matter “solely for the purpose of avoiding contested litigation” with the DOJ.
The settlement awaits judicial approval.
