City of New York Takes Action To Limit Banking With Wells Fargo Following Discrimination Reports

NEW YORK, NY – New York City Mayor Eric Adams and Comptroller Brad Lander told Wells Fargo in a letter that the City of New York would refrain from opening new depository accounts with the bank following new reports of widespread discrimination against Black homeowners.

A Bloomberg News study published on March 11, 2022, found that Wells Fargo rejected over half of Black applicants seeking to refinance their homes in 2020, while approving 72% of white applicants. In 2021 the bank approved just 58% of Black applications, compared with 79% of white applicants.

In the letter addressed to Wells Fargo CEO & President Charles W. Scharf, Mayor Adams and Comptroller Lander state:

“As the Mayor and Comptroller of New York City, a diverse community where Black homeowners own and are the primary residents of more than a quarter of two-to-four person homes, we are both gravely concerned about the recent report in Bloomberg that Wells Fargo rejected over half of Black applicants seeking to refinance their homes in 2020 while approving over 70% of white applicants.

“These disparate mortgage practices, layered upon a checkered history of steering homeowners of color into subprime mortgages, rejecting mortgages in redlined neighborhoods, and numerous outstanding consent decrees pertaining to mortgage practices, require a swift response by both your bank and stakeholders.

“In light of this persisting track record of discrimination, New York City will not be opening any new depository accounts with Wells Fargo Bank, N.A. as we continue to investigate these troubling findings.”

Mayor Adams and Comptroller Lander appreciate that Wells Fargo is engaging with the City about these concerns, and look forward to continued public conversation about clear steps the bank will take to address the allegations contained within the article and additional best practices for fair lending.

The City of New York had taken Wells Fargo off the designated banking list in 2017 following concerns about discriminatory lending and predatory practices and the bank’s Federal Community Reinvestment Act rating of “needs improvement,” but added it back in 2021 after a contested vote. Currently there are no City agency deposit accounts open with Wells Fargo.

“It’s outrageous that Wells Fargo has continued to engage in lending discrimination against Black homeowners, even after paying a record settlement for similar actions over a decade ago that contributed to the foreclosure crisis,” said New York City Council Speaker Adrienne Adams. “These disturbing practices are part of a long legacy and history of discrimination against Black Americans for generations, extracting wealth from our communities that perpetuates the country’s wealth gap. As a City, we cannot in good conscience ignore this deplorable conduct. I support Mayor Adams and Comptroller Lander’s decision to stop opening depository accounts with Wells Fargo because these unacceptable actions must have consequences.”

“It has been a great time for homeowners to refinance their mortgages with Wells Fargo as long as the homeowners weren’t Black. This is indefensible, outrageous, and demands an immediate investigation. In a world where we already expect big banks to flout the law and make their own rules, Well Fargo really outdid themselves. Over the past two years – of all the major mortgage lenders – Wells Fargo was alone in rejecting more Black homeowners than it accepted. These brazen and illegal discriminatory actions have no place in New York City. I look forward to the day Wells Fargo faces true accountability; for now, the only moral choice for New York City is to do its banking elsewhere,” said Council Member Justin Brannan, Chair of the Committee on Finance.

“When mega-banks like Wells Fargo implement discriminatory lending practices, they perpetuate the deep inequities that have historically affected Black homeowners,” said Council Member Sandy Nurse, Chair of the Committee on Sanitation and Solid Waste Management. “The Comptroller and Mayor are making the right move by breaking with Wells Fargo. We should view this moment as an opportunity to move toward establishing an NYC Public Bank to get City funds out of the hands of giant banks altogether and truly invest our dollars in our city.”

“The disparity between Wells Fargo’s treatment of Black and White mortgage refinance applicants is appalling but unfortunately, unsurprising. Aspiring and existing Black homeowners have experienced blocked access to wealth building opportunities at the hands of private banks and even the government dating back generations. After a track record of steering homeowners of color into subprime mortgages, rejecting mortgages in redlined neighborhoods, and numerous outstanding consent decrees pertaining to mortgage practices, that Wells Fargo underwriting practices from 2017 to present are still resulting in these racist outcomes shows moral failure in an unwillingness to move forward from America’s racist history of disadvantaging Black homeowners. I applaud the Mayor and Comptroller for refusing to do business with Wells Fargo. Executives of this institution must answer for these inequities.” said Council Member Pierina Sanchez, Chair of the Committee on Housing and Buildings.

“At a time of financial prosperity, when members of our community have an opportunity to create generational wealth, it’s unfortunate that a large corporation like Wells Fargo continues to embrace discriminatory and illegal practices that rob hard working people of a fair chance. I’m glad to see the Mayor and Comptroller are putting Wells Fargo on notice because we cannot accept this kind of behavior in New York City. As the Chair of the Consumer Affairs and Worker Protection committee I want to make sure our City is working with institutions that value our right to own a home,” said Council Member Marjorie Velázquez, Chair of the Committee on Consumer & Worker Protection.

“As a representative of a predominantly Black homeowner community, it is incredibly disheartening, frustrating and unacceptable that Black people are still being discriminated against in the housing market. My district was one of the hardest hit during the housing crisis. Families lost their homes due to predatory lending practices that resulted in mass foreclosures, and many are still recovering from that era,” said Council Member Nantasha Williams, Chair of the Committee on Civil and Human Rights. “Wells Fargo Bank needs to be held accountable for their racist practices. We cannot allow modern day redlining to occur. I would like to thank Mayor Adams and Comptroller Lander for their strong stance against the bank, for opening an investigation into their predatory actions, and for taking strong action to hold them accountable.”

The full letter can be accessed here.

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