Philadelphia sues Wells Fargo, alleging minority loan bias
PHILADELPHIA — Philadelphia is suing Wells Fargo, claiming the bank overcharged more than 1,000 minority homeowners on mortgage loans since 2004.
Philly.com reports that the federal lawsuit cites six confidential informants who used to work for the bank. The lawsuit says unnecessarily expensive loans drove black and Hispanic borrowers toward foreclosure, costing the city unpaid taxes and lowering property values.
Wells Fargo spokesman James Baum says the city’s allegations are “unsubstantiated” and “do not reflect how we operate in Philadelphia” and elsewhere.
Baum says similar lawsuits brought in other states have been rejected by courts.
He says a May 1 Supreme Court ruling found banks “cannot be held responsible for harm they didn’t cause.”