This article discusses the amended discriminatory lending lawsuit against Wells Fargo that was given a green light by the United States District Court for the Central District of California. The amended lawsuit is based on allegations of Wells Fargo’s lending practices that had a discriminatory effect on African-American, Hispanic, and Asian borrowers. The class action complaint alleges that Wells Fargo steered borrowers into mortgages with less favorable terms and higher costs than available to similarly situated white borrowers.
The amended lawsuit consolidates 31 complaints alleging discrimination into one legal action. The lawsuit includes individual borrowers with mortgage applications older than 36 months, and also includes two subclasses that share basic allegations of disparate impact discrimination. The first subclass includes African-American, Hispanic, and Asian borrowers who have submitted applications for conventional loan products to Wells Fargo for which the bank granted the loan with less favorable terms than those to which similarly situated white borrowers were granted. The second subclass includes those same individuals who applied for a loan from Wells Fargo but the bank rejected the application with less favorable underwriting standards than those applied to similarly situated white applicants.
The amended lawsuit seeks class certification, financial relief in the form of damages, declaratory relief, and a permanent injunction requiring Wells Fargo to modify its procedures and to pay corrective damages for existing disparities among borrowers of different racial and ethnic groups. Wells Fargo will have an opportunity to respond to the lawsuit and contest the class-action certification in the coming future.
The amended discriminatory lending case against Wells Fargo is the latest case in a long line of legal actions against banks and other financial institutions concerning lending practices that are alleged to have a discriminatory effect. The outcome of this lawsuit could potentially set precedents regarding race-based discrimination in lending practices that could reverberate through the industry as a whole and affect how banks and other lenders conduct business in the future.
You can read this full article at: https://www.housingwire.com/articles/amended-discriminatory-lending-lawsuit-against-wells-fargo-gets-green-light/(subscription required)
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