Feds may seek fines against Wells Fargo in mortgage bias probe
Federal authorities have advised Wells Fargo & Co. that they may seek damages and fines for alleged discrimination in mortgage lending.
In a Securities and Exchange Commission filing Tuesday, the San Francisco bank disclosed the latest development in an ongoing investigation.
“The Department of Justice has advised Wells Fargo that it believes it can bring claims against Wells Fargo for monetary damages and civil penalties under fair lending laws,” the bank said in its 10-Q quarterly filing.
“We believe such claims should not be brought and continue seeking to demonstrate to the Department of Justice our compliance with fair lending laws.”
Wells Fargo has long been among the largest mortgage lenders and emerged in the first quarter as the overwhelming leader, with 34% market share compared to under 11% for runner-up JPMorgan Chase.
[Updated, 10:50 a.m. May 8: Wells’ filing did not elaborate on the accusations by the federal government, but fair-lending cases generally involve providing costlier loans to minorities when they should receive a better deal. In a fair-lending lawsuit filed in 2009, the Illinois state attorney general accused Wells of selling more costly subprime mortgages more often to blacks and Latinos compared with whites with similar incomes. Wells denied wrongdoing and the suit is pending.]
The feds also are investigating whether Wells Fargo misled investors in its mortgage bonds.
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