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Wells Fargo Hit With $3.5M Discrimination Class Action Verdict

  

                LOS ANGELES --After a three-month trial, a Los Angeles Superior Court jury returned a $3,520,000 lending discrimination verdict against Wells Fargo Bank. 

 

                The class action lawsuit alleged the bank consistently and knowingly discriminated against borrowers in minority neighborhoods, resulting in these borrowers paying more for their loans than borrowers in non-minority areas of Los Angeles County. The jury found that the race, color, ancestry and/or national origin of the plaintiffs and the class they represent was a “motivating reason” for Wells Fargo’s conduct.

 

                The jury found for 880 borrowers who obtained their loans from Wells Fargo branch locations in minority communities. Because the class plaintiffs brought the suit under the Unruh Civil Rights Act, qualifying class members will receive a statutory damage award of $4,000 per loan.

 

                Representing the class are A. Barry Cappello and Leila J. Noël, partners with Cappello & Noël, LLP, a Santa Barbara boutique litigation firm specializing in lender misconduct. “The culture at Wells Fargo Bank only pays lip service to fair lending,” says Cappello who is recognized as the pioneer of lender liability law. “No systems are in place to prevent managers from engaging in the most insidious form of discrimination against customers who are least equipped to deal with it.”

               

                In 2002, Wells Fargo introduced a computer program called "Loan Economics," which gave loan officers the ability to offer loan applicants lower pricing through reduced interest rates and points. The class action alleged that loan officers in predominately non-minority bank branches could use the program to price loans, while loan officers in predominantly minority bank branches could not. The evidence presented at trial was that Wells Fargo management prevented the branches in minority neighborhoods from using the program.

 

                "The Area Manager who oversaw bank branches in minority communities could make more money for himself if those minority branches didn't use the pricing program,” says Noël. “The discriminatory practice allowed him to benefit financially at the expense of his minority customers. When the branch managers and loan officers who worked in minority locations eventually learned that their counterparts in non-minority branches could use the program, they were outraged.”

 

                Class members were defined as borrowers who obtained a first trust deed-secured loan from Wells Fargo Bank or Wells Fargo Home Mortgage in an amount greater than $150,000 between May 2002 and December 2005. Members must have applied for their loans at Wells Fargo branches located within specific areas of Los Angeles County. A notice will be sent shortly to bank customers who are eligible for compensation.

 

 


STORY TAGS: Wells Fargo , class action , Black News, African American News, Minority News, Civil Rights News, Discrimination, Racism, Racial Equality, Bias, Equality, Afro American News



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