Business and Finance

NYC Mayor Eric Adams Is Taking a Stand Against Wells Fargo, City Government Won’t Open Any More Accounts Over Banks ‘Persisting Track Record of Discrimination’

3 years ago Sonya Mallard

Banking giant Wells Fargo has been embroiled in many discrimination lawsuits over the years, the most recent one in February for discriminatory lending practices. As a result of Wells Fargo’s discriminatory lending practices against Black homebuyers, New York City has announced the city government will not open any new bank accounts with Wells Fargo & Co.

“In light of this persisting track record of discrimination, New York City will not be opening any new depository accounts with Wells Fargo Bank, N.A. as we continue to investigate these troubling findings,” they wrote in a joint statement.

A Bloomberg News investigation helped NYC reach the decision. The Bloomberg investigation found the bank approved Black homeowners seeking to refinance mortgages during the pandemic at a much lower rate than white ones.

In a joint letter to Wells Fargo Chief Executive Officer Charlie Scharf, New York Mayor Eric Adams and Comptroller Brad Lander said the decision was due to the “checkered history” of Wells Fargo’s mortgage business going back to the 2008 financial crisis when the bank and others were accused, Investment News reported.

The proof of the problem at Wells Fargo is in the numbers: Wells Fargo approved just 47 percent of Black homeowners who completed applications to refinance mortgages in 2020, compared with 72 percent of white applicants, according to the Bloomberg report. Although its approval rate for Black applicants increased to 58 percent in 2021, it was still behind white homeowners, 79 percent of whom had their bid to refinance approved.

Wells Fargo was hit with a class-action race discrimination class action on Feb. 17, in California Northern District Court.

The suit was filed just as a federal judge dismissed another lawsuit against Wells Fargo for alleged discriminatory lending.