The Trump administration has opened an investigation into Wells Fargo over the bank’s years-long effort to increase homeownership among Black Americans.
The Department of Housing and Urban Development sent a letter Wednesday to Wells Fargo CEO Charlie Scharf saying it would examine whether the bank violated fair-lending laws by favoring Black and other minority homeowners, accusing the bank of “sorting” homeowners and offering different products or terms based on race, which the agency says may violate the Fair Housing Act, reported the Wall Street Journal.
“Even if Wells Fargo did not violate the law, its practice of dividing Americans based on race is immoral, unethical and un-American,” said Housing Secretary Scott Turner. “Wells Fargo and all of its employees that engaged in race-based decision-making should be ashamed of themselves.”
Turner condemned the bank in sweeping terms, suggesting its conduct was objectionable whether or not it broke any law.
HUD is also reviewing similar initiatives at other banks, according to a senior agency official, signaling the probe may be the opening shot of a wider crackdown.
Wells Fargo did not immediately comment.
The bank’s campaign dates back to 2017, when it pledged $60 billion in loans to help create at least 250,000 new Black homeowners by 2027.
In 2022, it expanded the effort, putting its own money toward refinancing minority homes after a Bloomberg report found the bank had rejected half of all refinancing applications from Black families in 2020.
At the time, Wells Fargo said the effort would “help close the homeownership gap between white and minority families created by decades of systemic inequities.”
Only 24 percent of Black households owned their homes as of 2024, according to the Pew Research Center, compared with 73 percent of white households.
By late 2023, Wells Fargo had reached about 40 percent of its $60 billion lending goal and helped refinance about 5,100 customers, saving them an average of roughly $100 a month. The bank has since gone quiet about the effort and removed a 2023 racial-equity assessment from its website.
The HUD probe is the latest move in the administration’s campaign against diversity, equity and inclusion programs in corporate America, many of which were launched in the wake of George Floyd’s 2020 murder.
The Justice Department has investigated government contractors over DEI practices, and last year IBM and Deloitte paid multimillion-dollar fines to resolve claims tied to diversity-related hiring and staffing decisions.
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