Washington, D.C. – U.S. Senators Ron Wyden, D-Ore., and Elizabeth Warren, D-Mass., have sent a letter to the CEO and President of Wells Fargo, after a report found the bank was the only major lender in the United States to accept less than half of mortgage-refinancing applications from Black homeowners. Wells Fargo’s acceptance rate for White homeowners was 25 percentage points higher than for Black homeowners.
“This shocking disparity—layered upon Wells Fargo’s long history of scamming and mistreating consumers of color—is unacceptable. Given these alarming revelations, we demand that Wells Fargo provide answers to our questions and additional information regarding its mortgage-refinancing practices and its potentially illegal discrimination against Black homeowners,” the senators wrote.
Mortgage refinancing is a critical tool for homeowners to build wealth, especially for communities of color in Oregon who have historically faced unequal access to homeownership. In the past two years, Black homeowners have been systematically shut out from a historic period of low-interest-rate refinancing, called a “remarkable wealth event.” Of the $5.3 billion in refinancing savings that homeowners acquired through October 2020, Black homeowners saved less than $200 million, or 3.7 percent of total savings.
The senators noted Wells Fargo’s history of scamming and mistreating consumers, and in particular, consumers of color, including a $184 million settlement in 2012 with the Department of Justice over allegations that the bank engaged in a “pattern or practice of discrimination against qualified African-American and Hispanic borrowers in its mortgage lending” by steering borrowers to subprime mortgages because of their race or national origin.
Given these deeply troubling figures and Wells Fargo’s history of mistreating consumers, the senators demanded that Wells Fargo provide information about their data and algorithms, analyses and action plans, and internal and external communications about their mortgage-refinancing program and low approval rates for Black homeowners by March 28, 2022.
The text of the letter is here.
A web version of this release is here.