New York Mayor Adams, says no to new business with Wells Fargo
In April, New York City Mayor Eric Adams vowed to discontinue forming any city business alliance with Wells Fargo bank due to the bank’s checkered past of discriminatory lending practices, redlining, and countless racial discrimination lawsuits from employees and customers.
In a joint statement issued to the media in April, Adams and City Comptroller Brad Lander wrote, “In light of this persisting track record of discrimination, New York City will not be opening any new depository accounts with Wells Fargo, N.A. We continue to investigate these troubling findings. The statement referred to a recent expose’ by Bloomberg News that found the bank discriminated in mortgage refinancing options for customers’ mortgages in areas of a community due to the racial and ethnic characteristics of the applicants’ neighborhood. In the Bloomberg investigation, Wells Fargo approved African American and Hispanic homeowners hoping to refinance mortgages at significantly lower rates than white homeowners during the pandemic. https://www.businessinsider.com/wells-fargo-under-scrutiny-over-refinancing-approval-rate-2022-3
The report showed the bank approved less than half—about 47 percent of African American homeowners’ refinance applications during the peak of the COVID-19 pandemic while approving nearly three-quarters—about 72 percent of all applications submitted by White homeowners. According to data from the Brookings Institute- a Washington DC-based think tank, the disparity in the approval rates is consistent with a trend in how racial bias distorts and misrepresents the housing market. In a statement, Andre Perry, a senior fellow at the Institute, said, “Discrimination in appraisals, the devaluation of homes and {mortgage refinance options} can be both systemic and individualistic.”
The San Francisco-based bank holding company has dozens of locations in New Jersey. It has a long and well-documented history of questionable lending practices, predatory fees, and discrimination. For example, in 2016, one of the highest-ranking, longest-serving, and most visible African American executives at the bank, suddenly resigned after a 23-year career with Wells Fargo. At the time, Brenda Ross Dulan was executive vice president and regional president of Wells Fargo’s Southern New Jersey region and headed the consumer banking division. In the aftermath of several high-profile lawsuits against the bank, Ross-Dulan left the bank. Many cases resulted in millions of dollars of fines and penalties levied against the bank. And in 2020, Wells Fargo agreed to pay $7.8 million in back wages regarding lawsuits that it discriminated in its hiring practices by failing to hire African American applicants for various available positions at bank locations across the country, including in New Jersey. The scandals eventually resulted in more than 5,300 employees being fired.
Wells Fargo defended its home mortgage practices in a statement to the media. In part, the statement read, “In 2020, Well Fargo was the largest bank lender for home mortgages to Black families. This is consistent with the company’s performance over the last decade, in which it helped as many Black families purchase homes as the next three largest bank lenders combined. Any suggestion that our home lending practices are discriminatory is meritless.”
Lastly, Sens. Elizabeth Warren (D-Mass) and Ron Wyden (D-Ore) continue to press for more answers and information about the bank. In a widely circulated letter to the Federal Reserve late last year, Warren said, “Every day that Wells Fargo continues to maintain these depository accounts is a day that millions of customers remain at risk of additional negligence and willful fraud.” Warren said Wells Fargo should separate its traditional banking services from non-traditional services.