A Wells Fargo discrimination lawsuit has been filed against the bank institution, accusing it of charging female and minority customers more for borrowing money. They were sued Friday by Cook County, Illinois, for discriminating against black, Hispanic, and female mortgage borrowers in the Chicago area, Reuters reports.
This the newest lawsuit filed against Wells Fargo after it’s been known for its biased lending practices against minority and female borrowers the past 10 years in the Illinois region with a goal of maximizing profit, according to a 152-page complaint filed in the in the U.S. District Court in Chicago.
As the complaint alleges, the bank targeted time loans made through foreclosure via “equity stripping.” Those kinds of loans are “imposition of inflated or unnecessary rates and fees, as well as penalties to refinance.”
Cook County accuses Wells Fargo of taking part in “deliberate” and “egregious” activities that have affected 26,000 borrowers as well a “eroded” the county’s property tax base, and “forced the county to spend more to combat blight from abandoned properties.”
Damages allegedly add up to $300 million or more. The bank is also facing a federal lawsuit in its lending practices.
Cook County, which has a population of five million, wants a court order to stop Wells Fargo’s wrongful practices as charged. It’s the third-biggest U.S. city accusing the bank of targeting minorities. Others that have previously filed lawsuits against Wells Fargo are governments in Los Angeles and Miami, Charlotte Observer reports.
Cook County also seeks compensatory and punitive damages in the lawsuit.
A definition of equity stripping in the Wells Fargo discrimination lawsuit is outlined in Charlotte Observer.
“Equity stripping is an abusive form of ‘asset based lending’ that maximizes lender profits based on the value of the underlying asset and onerous loan terms, while in disregard for a borrower’s ability to repay.”
How did the bank try making money off minority women? The way it bundled mortgages to sell as securities, which allowed it to make money off loans even if foreclosures occur.
Spokesman Chris Hammond of the Wells Fargo’s San Francisco-based lender has declined comment on the Cook County lawsuit.
Wells Fargo’s discrimination involved lenders issuing loans to minority and female customers — aware that they’d fail, but put them through anyway.
The Inquisitr reported on a very similar lawsuit when Wells Fargo agreed to a settlement in July 2013 to pay $175 million for charging black and Hispanic mortgage borrowers thousands more.
[Image via Political Ear]