| Wells Fargo Sued by City of Oakland Over Predatory Lending | |
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Already burdened by mounting legal woes, Wells Fargo & Company WFC, one of the biggest players in the U.S. mortgage business, faces yet another suit over its discriminatory lending practices. This time the company has been sued by the city of Oakland.
The suit filed on Monday in federal court, accuses Wells Fargo of targeting African-American and Hispanic residents of Oakland along with minority neighborhoods for issuing loans with more expensive and higher risk compared to loans made to white borrowers. The lawsuit also alleges that Wells Fargo violated the California Fair Employment and Housing Act, and is seeking undisclosed amount of damages.
The lawsuit mentioned that the African-American borrowers were 2.4 times more likely to receive a predatory loan than white borrowers while Hispanic borrowers were 2.5 times more likely to obtain a predatory loan. It further claimed that most of such loans led to foreclosures as the company denied refinancing the loans on the similar terms it offered to white borrowers.
Barbara Parker, the city attorney for Oakland stated “Wells Fargo’s discriminatory conduct devastated individuals and communities, increasing poverty and wiping out or drastically reducing wealth for minority communities while bankers prospered.”
Denying allegations, a Wells Fargo spokesman said “The City Attorney’s accusations against Wells Fargo do not reflect how we operate in the communities where we do business." He further added, “Wells Fargo has been a part of the Oakland community for more than 140 years and we will vigorously defend our record as a fair and responsible lender.”
Notably, in July 2015, U.S. District Judge Otis Wright dismissed a similar suit brought by the city of Los Angeles.
Several cities have sued major banks over charges of predatory lending. While some cases have been settled, some are yet to be resolved. We believe settlement of such issues would put the mortgage borrowers at ease to some extent. Such settlements also provide some relief to the companies and their shareholders as it reduces the litigation overhang. However, the company’s dented financials and goodwill due to such lawsuits cannot be ignored.
Wells Fargo sport a Zacks Rank #2 (Buy). Some other top-ranked stocks in the major-banks space include The PNC Financial Services Group, Inc. PNC, U.S. Bancorp USB and SunTrust Banks, Inc. STI. All these stocks sport the same rank as Wells Fargo.
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Wells Fargo est une société d’exploration minière basée aux Etats-Unis D'Amerique. Wells Fargo est cotée aux Etats-Unis D'Amerique. Sa capitalisation boursière aujourd'hui est 300,8 milliards US$ (281,1 milliards €). La valeur de son action a atteint son plus bas niveau récent le 03 juillet 1997 à 10,01 US$, et son plus haut niveau récent le 25 avril 2024 à 60,20 US$. Wells Fargo possède 4 997 319 680 actions en circulation. |