Wells Fargo
Lawsuits against Wells Fargo
2008 Baltimore lawsuit
In 2008 the city of Baltimore initiated a lawsuit against Wells Fargo claiming the bank had targeted Black communities for deceptive, predatory and other unfair loan practices, which resulted in thousands of foreclosed homes. Between 2000 and 2009, 33 thousand homes in Baltimore had been placed into foreclosure. The lawsuit said that these foreclosures hurt the city by reducing property values and reducing city revenue via decreased property taxes and real estate transfer fees. The lawsuit cited surveys done in Chicago and Philadelphia regarding the negative effects of foreclosed homes on the surrounding areas through decreased property values. [1] [2]
2012 Class Action Lawsuit
In 2012 the United States department of justice reached a 184.2 million dollar settlement agreement with Wells Fargo over their discriminatory mortgage lending practices to African-American and Hispanic borrowers. At the time it was the second largest settlement of its nature. [3] In regards to the court case the justice department stated:
"The settlement, which is subject to court approval, was filed today in the U.S. District Court for the District of Columbia in conjunction with the department’s complaint, which alleges that between 2004 and 2008, Wells Fargo discriminated by steering approximately 4,000 African-American and Hispanic wholesale borrowers, as well as additional retail borrowers, into subprime mortgages when non-Hispanic white borrowers with similar credit profiles received prime loans. All the borrowers who were allegedly discriminated against were qualified for Wells Fargo mortgage loans according to Well Fargo’s own underwriting criteria.":
401K Lawsuit
Between 2013-2018, the United States department of labor found, Wells Fargo employees had overpaid for the companies stock in their retirement plans. Wells Fargo agreed to pay out 131.8 million dollars directly to individuals affected by the overpriced stock and was also made to pay an additional 13.2 million dollars in penalties. [4] [5]
2020 Civil and Criminal Settlement
In February of 2020 Wells Fargo agreed to a 3 billion dollar settlement to settle criminal and civil lawsuits pertaining to unlawful sales practices between 2002-2016. The department of justice stated Wells fargo and its subsidiaries:
have agreed to pay $3 billion to resolve their potential criminal and civil liability stemming from a practice between 2002 and 2016 of pressuring employees to meet unrealistic sales goals that led thousands of employees to provide millions of accounts or products to customers under false pretenses or without consent, often by creating false records or misusing customers’ identities, the Department of Justice announced today.
The illegally opened accounts resulted in Wells Fargo collecting millions of dollars in fees and interests and negatively affecting customer's credit scores in some cases. [6] John Stumpf, CEO of Wells Fargo between 2007-2016, was banned from ever working at a bank again, because of the criminal actions of Wells Fargo, by the federal government and agreed to pay a 2.5 million dollar fine to the SEC. [7]
In September of 2021 Wells Fargo was fined 250 million dollars by the Office of the Comptroller of currency for failing to meet its repayment requirements regarding the lawsuit. [8]
Connections to Police Organizations
Sources
- ↑ How Racism Takes Place, George Lipsitz, Page 106
- ↑ https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1011489
- ↑ https://www.justice.gov/opa/pr/justice-department-reaches-settlement-wells-fargo-resulting-more-175-million-relief
- ↑ https://www.forbes.com/sites/dereksaul/2022/09/12/wells-fargo-shells-out-145-million-to-end-feds-401k-investigation/?sh=565f623c4724
- ↑ https://www.dol.gov/newsroom/releases/ebsa/ebsa20220912
- ↑ https://www.justice.gov/opa/pr/wells-fargo-agrees-pay-3-billion-resolve-criminal-and-civil-investigations-sales-practices
- ↑ https://www.forbes.com/sites/dereksaul/2022/09/12/wells-fargo-shells-out-145-million-to-end-feds-401k-investigation/?sh=565f623c4724
- ↑ https://www.occ.gov/news-issuances/news-releases/2021/nr-occ-2021-95.html