Wells Fargo workers allege anti-Latino bias in predatory mortgage scheme

The suit alleges that bilingual mortgage sellers and customers were discriminated against through a predatory lending scheme

Wells Fargo has been sued in U.S. District Court for the Western District of Texas by a group of current and former staffers from the company’s bilingual mortgage sales team alleging race-based discrimination. This is according to original reporting by Bloomberg and court documents reviewed by HousingWire.

“Wells Fargo forces its employees on the Bilingual team to offer predatory lending options to Spanish-speaking customers,” the initial legal complaint reads. “For example, Wells Fargo has developed an ‘Earn the Business’ program for the Bilingual team. In the fall of 2022, management created a mandatory Bilingual team program whereby employees were instructed to offer a ‘Refinance Cash Out’ product without directly mentioning the substantial financial cost of the product to borrowers.”

The company’s management team implemented this policy, the complaint alleges, because refinancing can come with high closing costs that range between $5,000 and $10,000 dollars.

“Managers of the Bilingual team directed employees to steer customers away from Home Equity Lines of Credit (HELOC), which carry no closing costs, and into refinancing without disclosing the closing costs,” the complaint alleges.

Members of the bilingual team expressed concern about the policy to management, the complaint says. Their alarm was heightened due to Wells Fargo’s lack of providing Spanish-language written materials to Spanish-speaking customers, which creates a barrier to full understanding of the documents they’re asked to sign, the plaintiffs allege.

“Customers sometimes call into the Bilingual team months after closing a refinance cash out, surprised to discover they have been charged substantial closing costs,” the complaint alleges. “Nevertheless, management instructs the Bilingual team, ‘Don’t mention cash out.’ Instead, management instructed employees to build a rapport with borrowers to gain the customers’ trust.”

The complaint goes on to allege that the company has issues with “institutional racism and discrimination” that extends beyond its customers and to its employees by disallowing members of the bilingual team to participate in a pilot program introduced in late 2021 in which mortgage consultants were “guaranteed commissions regardless of their actual sales,” the complaint says.

“Despite frequent requests, Wells Fargo refused to allow the Bilingual team (which is composed entirely of Hispanic employees who are from Mexico) to join the Pilot program,” the complaint alleges. “Only members of the English-only team were permitted to join the Pilot program. Wells Fargo’s policy constituted intentional discrimination against Hispanic employees from Mexico.”

Because of their inability to join the pilot program, the complaint alleges that members of the bilingual sales team suffered a disparate financial impact particularly after higher rates generally drove mortgage business down nationally.

The suit cites previous reporting by Bloomberg showing that Wells Fargo rejected half of its Black applicants in 2020. In response to a court order to pursue private mediation, lawyers for Wells Fargo and for borrowers told a judge in June they will work with a retired federal judge’s mediation service to try to resolve lawsuits alleging widespread discrimination against Black homeowners, Bloomberg reported.

The bank, which paid a $3.7 billion fine in December over an array of violations, including mortgage lending, did not immediately respond to a request for comment.

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