Our lawsuit against Wells Fargo for racially discriminatory mortgage lending practices cleared a major hurdle this month when the Court denied a motion by the bank to dismiss the case.
U.S. District Court Judge Edward M. Chen's ruling allows Oakland to proceed with our lawsuit against Wells Fargo for targeting African American and Hispanic borrowers, including minority churches and congregations, for predatory mortgage loans in violation of the federal Fair Housing Act and California's Fair Employment and Housing Act.
I filed the lawsuit in September to recover damages caused by the bank's illegal and unconscionable lending practices in Oakland.
We intend to prove that Wells Fargo, the nation's largest mortgage lender, systematically issued more expensive and higher risk loans to minority borrowers even though they qualified for more favorable loans that the bank regularly issued to white borrowers.
For example, according to the U.S. Department of Justice, in 2007 a typical African American borrower in Chicago seeking a $300,000 loan from Wells Fargo paid nearly $3,000 more in fees than a similarly qualified white applicant.
In Oakland we know the devastating damage banks' targeting of minority borrowers for predatory loans has caused.
Thousands of our residents lost their homes due to foreclosure. In addition to losing millions in tax revenues, which necessitated police layoffs and cuts in vital City services such as parks, library services and street and sidewalk maintenance, the bank's predatory actions saddled the City and its taxpayers with the massive costs of addressing blight, vandalism and crime associated with foreclosed properties.
As I stated when we filed the case, Wells Fargo's discriminatory conduct devastated individuals and communities, increasing poverty and wiping out or drastically reducing wealth for minority communities while bankers prospered.
Wells Fargo and other banks knew when they issued predatory loans that many of them would result in foreclosure. None of the responsible bankers have been held personally accountable in any meaningful manner, and the leaders of these institutions earned millions of dollars generated in part by issuing toxic loans to minorities.
Los Angeles is appealing the dismissal of its lawsuit against Wells Fargo which was filed on the same grounds as our case. So Judge Chen's ruling was an important win for Oakland. It affirms that the City has the right to proceed with this important case.
We note that although the Los Angeles lawsuit was dismissed, a federal appeals court in Florida recently ruled that cities in that state were able to sue a different bank under the Fair Housing Act. And Wells Fargo has agreed to settlements of hundreds of millions of dollars to resolve discriminatory lending actions by the cities of Memphis and Baltimore and the U.S. Department of Justice.
Wells Fargo, one of the most powerful companies on our planet, must be held accountable for its destructive, reckless and discriminatory actions. I will keep you updated about our progress in future newsletters.
