Regulators from the federal government and multiple states launched an investigation into Wells Fargo and other major banks for allegedly discriminating against minority borrowers by charging them higher rates and fees for mortgages.
The Consumer Financial Protection Bureau (CFPB) and the Departments of Justice (DOJ) and Housing and Urban Development (HUD) announced Thursday that the investigation focused on allegations of pricing discrimination by Wells Fargo and its subsidiaries in the past decade.
The investigation is being conducted under the Fair Housing Act and the Equal Credit Opportunity Act.
The investigation comes after numerous complaints of alleged discrimination filed against the lender, including accusations that the bank allegedly charged African-American and Hispanic borrowers higher rates and fees than white borrowers with the same creditworthiness.
“The fair lending laws are designed to ensure that people’s homes are not priced or offered on the basis of race or ethnicity,” Eric S. Halperin, the DOJ’s Acting Assistant Attorney General for Civil Rights, said in the joint statement.
The CFPB, DOJ and HUD are opened to reaching out-of-court resolutions with Wells Fargo and other banks being investigated. It is not yet known if the banks will face any legal action or financial penalties.
