Lending institution Well Fargo & Co. has been ordered by the state of Philadelphia to pay $10 million in damages to address its discriminatory lending practices. The court ordered the San-Francisco-based lender to settle its lawsuit following accusations that the firm targeted minorities.
The settlement brings the 2017 lawsuit to its end after the state of Philadelphia filed a case against Well Fargo & Co., accusing it of going against the Fair Housing Act.
According to the Philadelphia Inquirer, the lending institution offered and provided riskier and more expensive housing options and mortgages to minorities. In particular, African Americans and Hispanics were reportedly targeted by the bank.
Due to the more expensive policies extended to these borrowers, the complaint said the actions of the lender “suppressed property values… reduced the city’s property tax revenues, and increased the cost of providing municipal services.”
In a press release made by Philadelphia Mayor Jim Kenney, the politician said “this agreement brings substantial support to the very communities that most need this assistance. Philadelphia is committed to ensuring that no one faces additional hurdles toward homeownership because of their race or ethnicity.”
Apart from these allegations, the lawsuit also claims that the San Francisco-based lending institution also failed to provide credit or refinancing options to individuals seeking to refinance their home loans, reveals the Philadelphia Inquirer.
Despite agreeing to settle the $10 million fine, Reuters reports that Wells Fargo & Co. maintains its innocence on the said issued. In a statement, regional bank president for the firm, Joe Kirk, said that they are “pleased that we’ve been able to resolve this matter in a way that will provide real, tangible sustainable homeownership opportunities.”
Based on the article released by the American Banker, Wells Fargo is facing other similar lawsuits from different parts of the country. These include Oakland and Sacramento in California, Cook County in Illinois, and Prince George and Montgomery countries in Maryland.