Illinois and the federal Justice Department have reached a settlement with Wells Fargo over discriminatory lending practices. Brian Mackey has more:
Illinois Attorney General Lisa Madigan didn’t pull any punches when she announced the settlement.
MADIGAN: “If you were a person of color shopping for a Wells Fargo mortgage at the height of the housing bubble, your chances of being sold a high-cost, high-risk loan were far greater than those of a white borrower.”
Madigan says Wells Fargo directed African Americans and Latinos toward subprime mortgages, or charged them higher fees than similarly situated white people.
The settlement calls for Wells Fargo to pay at least $175 million, including cash payments to the 3,300 Illinois victims identified so far.
Madigan: “Decades of economic progress by African-American and Latino families are at risk of being erased, because lenders such as Wells Fargo pushed the most toxic home loans on borrowers of color during the housing boom.”
Wells Fargo denied the claims and said the mortgatges were sold by independent brokers. The company said it was settling in order to avoid a court fight with the U.S. Department of Justice.
— Brian Mackey