Cook County, Illinois accused Wells Fargo (WFC) of targeting black and Latino borrowers for more costly home loans than their white counterparts in the Chicago area. Per Bloomberg:
The bank’s tactics start at home-loan origination and continue through refinancing and foreclosure, the country said, a process its lawyers summarized in the complaint as “equity stripping.” The process may have involved as many as 26,000 loans, the county said.
“Equity stripping is an abusive form of ‘asset based lending’ that maximizes lender profits based on the value of the underlying asset and onerous loan terms, while in disregard for a borrower’s ability to repay,” according to the complaint.
In response, the article included a statement from Wells Fargo's Tom Goyda, a spokesman for the San Francisco-based bank, calling the county’s case “baseless” and stating that Wells Fargo would vigorously defend itself.
“It’s disappointing they chose to pursue a lawsuit against Wells Fargo rather than collaborate together to help borrowers and home owners in the county,’’ Goyda said. “We stand behind our record as a fair and responsible lender.”