The Trump administration on Wednesday accused Wells Fargo, one of the nation’s largest mortgage lenders, of discriminating against home buyers by creating programs that favored minority applicants for loans.
The allegations came in a letter from the Department of Housing and Urban Development to Wells Fargo’s chief executive, Charles Scharf.
The letter, signed by Craig W. Trainor, an assistant secretary, said the San Francisco bank was being investigated for violations of the Fair Housing Act, a Civil Rights-era law that banned banks and other lenders from considering race, religion, sex and national origin, among other factors, in their underwriting.
In his letter Mr. Trainor cited “repeated public promotion of explicit race-based policies,” including offering Black homeowners lower-cost refinancing and the creation of a $150 million so-called credit program “to advance racial equity in homeownership.” He raised the specter of expanding the investigation to include the Department of Justice.
Black and Hispanic families are far less likely to own homes than their White and Asian counterparts, according to the Pew Research Center.
“Attempting to close statistical racial gaps in homeownership by doling out loans based on race is no way to do business,” Mr. Trainor wrote.
Jennifer Langan, a Wells Fargo spokeswoman, declined to comment. The bank’s shares, ended the day 1.5 percent lower. The letter was first reported by The Wall Street Journal.
The behavior in question dates to when “under the Biden administration, race-conscious lending programs proliferated throughout the financial sector,” according to the HUD letter.
Wells Fargo publicly promoted its minority-focused program in news releases and on its website. It has since deleted many of those references.
The new investigation adds to the Trump administration’s efforts to punish corporate America for expanding programs aimed at Black Americans after the nationwide protests set off by George Floyd’s death in 2020.
The Trump administration has repeatedly raised instances of what it considers reverse discrimination, most recently accusing the law school at the University of California, Berkeley, of penalizing white and Asian applicants.
Under Mr. Trump, federal agencies, including the Equal Employment Opportunity Commission and the Department of Justice, have criticized diversity, equity and inclusionprograms for favoring minority employees over white ones.
Earlier this year, Mr. Trump said in an interview that he believed laws and policies dating to the 1960s, such as affirmative action, had resulted in white people being “very badly treated.”
Financial institutions, however, have until now mostly escaped the White House’s criticism of race-based programs. Mr. Trump in his second term has been more focused on whether banks have discriminated against conservatives — including him personally — by closing certain customers’ accounts, a process known as “debanking.”
Wells Fargo was among the large banks cited last year by the administration’s regulators for engaging in the practice. Industry representatives have said bank accounts are not closed for political reasons.
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