Wells Fargo Suit Gets Class Action in Los Angeles
[Update 1: Adds statement from Wells Fargo] A lawsuit filed on behalf of minority mortgagors against Wells Fargo (WFC) will proceed as a class action case after a Los Angeles Superior Court judge certified it as such. The suit alleges Wells Fargo discriminated against as many as 10,000 borrowers in minority communities by charging more for loans than borrowers paid in other parts of Los Angeles County. While Wells Fargo branches in some parts of the county were given access to a software product that allowed loan officers to provide discounts to customers, that same software, and in turn, the discounts, was not available to branches located in minority communities, according to a statement from the office of the law firm representing the class. “Well Fargo allowed some bank branches to use the program to price loans, and at the same time prevented other bank branches from doing so. The branches that were prevented from using the program were in predominately minority communities," said A. Barry Cappello, managing partner Santa Barbara-based Cappello & Noël law firm. "Those branches that could use the program were in predominately white communities." The plaintiffs are seeking $4,000 in damages for each of the loans allegedly affected. Mortgagors eligible to join the case must have obtained a first-lien mortgage for more than $150,000 from Wells Fargo Bank or Wells Fargo Home Mortgage branches in specific portions of Los Angeles County between May 2002 and December 2005. Attorney Leila Noël, another partner at the firm, said Wells Fargo loan officers asked to use the discount software, but upper management would not allow it. “A class action is the appropriate means to bring this type of discriminatory practice to light,” Cappello said. “The majority of class members are not even aware that they paid or continue to pay extra for their home loans. And they never would have known if it weren't for conscientious former Wells Fargo employees who decided to speak out.” In a prepared statement, Wells Fargo said: "We are disappointed in this ruling and intend to vigorously defend this matter as the case proceeds. The decision does not indicate the court believes the underlying allegations have any merit. We feel the allegations represent a complete mischaracterization of our long-standing commitment to responsible lending and the pricing practices and tools we use. The policies, systems and controls we have in place ensure race is not a factor in the pricing or products we offer." Write to Austin Kilgore.