Maxine Waters Says Regulators Should Address Wells Fargo’s ‘Anti-Consumer Behavior’
Rep. Maxine Waters (D-Calif.), chairwoman of the House Financial Services Committee, has sent a letter to U.S. regulators over Wells Fargo’s allegedly discriminatory conduct and “anti-consumer behavior.”
The letter is concerning allegations that Wells Fargo denied Black refinancing applicants when interest rates were low, and that the company also hosted “mock” interviews with diverse people to pad out their diversity numbers, according to a Wednesday (June 29) House Committee on Financial Services press release.
Waters wrote in the letter that she wanted to share her “profound disappointment and significant concerns” in regards to Wells Fargo’s conduct, including other scandals over the years, most notably when the bank created millions of unauthorized accounts in peoples’ real names.
“The need for warnings and ‘cost of doing business fines’ have long passed,” Waters wrote. “The asset cap imposed by now-Treasury Secretary Janet Yellen has failed to force the bank to change its behavior. Despite Mr. Scharf’s leadership, Wells Fargo continues to display a troubling pattern of bad behavior with an inability to competently redress such patterns.”
She wrote that in the wake of that scandal, in 2020, the bank reportedly only been accepted 47% of Black homeowners’ refinancing applications, as opposed to 72% of white ones. Waters also said Wells Fargo was the biggest mortgage provider to Black homeowners in 2020, and did help many Black people — but the disparity between acceptance for Black and white people in this regard was bigger than any other bank.
“Consumers and homeowners deserve to be treated with respect and it is their civil right under the Fair Housing Act and the Equal Credit Opportunity Act to access credit equally and fairly, regardless of the color of their skin,” Waters wrote.
In response, a Wells Fargo spokesperson said the bank had been “disappointed” to see Waters’ letter, adding that all it had done was rehash older issues.
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The spokesperson said Wells Fargo was a “different bank today” than it was a few years ago, and that it had a new management team “that has the skills and experience necessary to successfully implement the enterprise-wide transformation Wells Fargo is undergoing.”
The spokesperson added that the bank had a solid commitment to people and communities of color, noting that in 2021, over 42% of hires for positions for $100,000 or more in annual compensation identified as “racially and/or ethnically diverse,” a 5% increase from 2019.
In addition, the spokesperson said that recent stories had “ignored critical information” about lending to Black homeowners. The company said it had helped “as many Black families purchase homes as the next three largest bank lenders combined.”
The spokesperson also noted the rollout of Wells Fargo’s Special Purpose Credit Program (SPCP) that helps minority homeowners refinance mortgages, and said the bank had worked with its Wells Fargo Foundation to commit another $60 million to support 40,000 homeowners of color, in markets with big gaps for homeowning numbers between races.
However, Waters noted that a report from The New York Times said the bank had been falsely beefing up diversity and inclusion data through conducting interviews with women and candidates of color, which the article noted seemed to be “more about helping Wells Fargo record its diversity efforts on paper — partly in anticipation of possible regulatory audits — rather than hiring more women or people of color.”
Wells Fargo, along with money transfer service Zelle, is also facing a class-action lawsuit based on allegations that it violated the Electronic Fund Transfer Act and California’s Unfair Competition Law.
Read more: Wells Fargo Facing Class-Action Lawsuit Over Alleged Zelle Scams
The case concerns allegations that a victim had thousands of dollars stolen from them by scammers imitating a Wells Fargo customer service agent.