New home construction. Photo: Getty Images
Mortgage lending patterns by banking giant Wells Fargo show “significant racial disparities” in Charlotte and across North Carolina, according to a new study by a national financial watchdog.
Americans for Financial Reform Education Fund released a report Wednesday showing that Wells Fargo denied Black, Latino and Asian mortgage applicants about twice as frequently as white applicants.
Patrick Woodall (Photo: Americans for Financial Reform Education Fund)“It does raise significant questions about Wells Fargo’s interest and willingness to serve the entirety of the community in North Carolina,” Patrick Woodall, managing director of the nonprofit, nonpartisan advocacy organization, told NC Newsline.
Between 2020 and 2024, the San Francisco-based bank, which has a regional hub in Charlotte with 27,000 employees, rejected 22.5% of Black applicants, 25.6% of Latino applicants and 20.3% of Asian applicants in North Carolina, compared with 10.3% of white applicants, according to the report.
The report calls on Wells Fargo to improve its performance in meeting mortgage needs in North Carolina, and to increase its outreach to Black, Latino and Asian applicants and communities. It also called on regulatory agencies to investigate Wells Fargo to ensure compliance with fair lending laws and asked local governments to revisit business relationships between their communities and the bank.
NC Newsline’s calls and email to Wells Fargo were not returned.
Woodall said racial disparities in the bank’s lending pattern persisted even when controlling for income.
“It is highly suggestive to me that their businesses really focus on upper-income white borrowers and neighborhoods,” Woodall said “This can happen in a number of ways, but it’s suggestive of greater outreach and greater effort in whiter parts of North Carolina.”
Titled “Dreams Denied: Wells Fargo’s Troubling Pattern of Racial Disparities in North Carolina,” the report examined nearly 25,000 North Carolina mortgage applications and more than 16,000 mortgage loans at Wells Fargo between 2020 and 2024.
Here are more key takeaways from the study:
Wells Fargo mortgage denial rates for Black and Latino applicants increased between 2020 and 2024. Wells Fargo’s denial rates rose about a fifth for Black and Latino applicants over that period, , rising from 21.2% to 25.6% for Black applicants and from 25.0% to 29.8% for Latino applicants. Over the same period, denial rates for White applicants increased by only about a tenth. Wells Fargo underrepresents Black and Latino applicants and borrowers in Charlotte: Black adults make up 22.9% of the population of the metropolitan area of Charlotte — North Carolina’s biggest city — but they composed less than one-tenth of Wells Fargo’s applicants and loan originations in the area (8.2% and 7.1%, respectively). Latino adults make up 11.0% of the Charlotte population but represented only 7.4% of Wells Fargo’s applicants and 6.6% of its loan originations. Wells Fargo underrepresents communities of color: Wells Fargo took fewer applications and made fewer loans in census tracts where people of color made up a majority of the population. People of color comprise the majority of the population in 27.3% of North Carolina census tracts, but Wells Fargo took only 15.4% of its mortgage applications and made only 14.3% of its loans in these areas.Ericka Taylor, co-executive director of Americans for Financial Reform Education Fund, said in a statement that the bank’s pattern of under-serving people and communities of color and its high rejection rates of Black and Latino mortgage applicants is “especially troubling” in the wake of the Trump administration’s effort to roll back civil rights and fair lending enforcement.
“And the bank’s record of racial disparities in its home purchase lending not only undermines people’s ability to build wealth and invest in their families’ futures, but it also perpetuates the yawning racial wealth gap that is an injustice for these families and for all of us,” Taylor added.
(Graphic: Americans for Financial Reform Education Fund)In North Carolina, the nation’s fourth-largest bank saw a 70% decline in applications for conventional home purchase mortgages and mortgage loan originations from 2020 to 2024, the report said. And while some of the decline is tied to rising interest rates during that period, the report contends “multiple regulatory and enforcement” actions against the bank over racial lending patterns also contributed to the decline.
Bloomberg, for example, reported in 2022 that Wells Fargo rejected more than half of Black homeowners who sought to refinance their mortgages in 2020 during a period of historically low interest rates. Also in 2022, the Consumer Financial Protection Bureau ordered the bank to pay more than $2 billion in redress to consumers and a $1.7 billion civil penalty for legal violations across several of its largest product lines. The bank’s illegal conduct led to billions of dollars in financial harm to its customers and, for thousands of customers, the loss of their vehicles and homes.
Americans for Financial Reform Education Fund partnered with North Carolina United Power for Action/NC Industrial Areas Foundation, Organized Power in Numbers and UNITE HERE North Carolina to produce the report.
“Housing is not a privilege for some — it’s a basic need. When race decides who gets access, it goes against our deepest moral beliefs,” said Bishop Herbert Reynolds Davis, chairman of the Board of Directors of NC United Power for Action.
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