Wells Fargo to Lend $1 Billion in Poor Areas

Wells Fargo Bank announced Wednesday that it plans to lend $1 billion over the next seven years in lower-income neighborhoods and to low- to moderate-income borrowers, which would roughly double the bank’s annual commitment to community reinvestment.

It is the largest such goal in California’s history, said Gail Hillebrand, an attorney for Consumers Union--one of many groups that have complained that banks have failed to provide services to the poor and to invest in poorer communities.

“We are very pleased to see them taking the lead in consumer credit,” Hillebrand said.

Michelle C. White, housing attorney for the Western Center on Law and Poverty in Los Angeles, said: “If it gets to the right people, it will be wonderful.”

Under the companywide plan, the bank has formed a new interdepartmental unit called the Corporate Community Development Group to provide consumer credit and loans for low-to-moderate income families for housing. The $1 billion, seven-year goal averages about $143 million a year.

Wells Fargo is currently financing the 130-unit Westminster Park Plaza in Watts--the largest housing project built there in the last 25 years--said Karen Wegmann, who will oversee the program.

Wegmann said: “We hope (the new plan) will help as many people as there are projects that we can identify.”

During the last four years, Wells Fargo, the state’s third-largest bank, averaged $75 million in community redevelopment loans.

This is not the first $1-billion community reinvestment plan, however.

In January, a consortium of Massachusetts banks agreed to a $1-billion reinvestment plan to help provide better banking services for minorities.