Thursday, July 12, 2012

Banking On Racism

You know that silly Wells Fargo ad where that white couple named Mike and Brenda miss an opportunity to bid on a house in a part of the town they live in - much to the relief of Mike, because the house is directly across the street from Brenda's sister?  And they get help from Wells Fargo to move on the next house for sale that they find - on the other side of town? Well, if Mike and Brenda were black or Hispanic, Mike's sister-in-law would have been the least of his problems.
The Justice Department and Wells Fargo announced a settlement in a case that stemmed from the discovery that Wells Fargo had been discriminating against black and Hispanic borrowers in its mortgage lending between 2004 and 2009.  Pending a judge's approval, Wells Fargo, the the largest residential home mortgage originator in the United States, will pay $125 million to compensate minority borrowers the Justice Department said were targeted for risky subprime mortgages, which usually carry higher fees. Wells Fargo will also fork over an additional $50 million to help borrowers making down payments in regions of the nation where the government found the most discrimination victims.  Wells Fargo denied discrimination and said it only agreed to the settlement to avoid further litigation, but this $175 million payout sounds like much more than conscience money.
Oh yeah, this comes seven months after Countrywide Financial, a subsidiary of Bank of America - which is not the bank Amadeo Giannini founded in San Francisco to help struggling immigrants, but instead was bought out by a larger bank that merely uses its name (good for business) - pay a record $335 million to settle similar discrimination charges.
American banks are not only too big, they're too arrogant.  They've been increasing their exploitation of a population segment - Hispanics and/or non-whites, which is also increasing - and making home ownership more expensive for people simply because their skin is darker or because they speak with an accent.  But U.S. Representative Luis Gutierrez, an Illinois Democrat, was pleased with the settlement.  He said it would help send a message to banks that they couldn't get away with such behavior and that the Wells Fargo  settlement would help his largely Latino district, which is anchored by the Lower West Side of Chicago.  Still, he's not (and I'm not) happy that no one at Wells Fargo is being prosecuted for this. 
"When someone in my neighborhood robs a bank, they go to prison," Gutierrez said.  "If a bank robs my neighborhoodnobody goes to prison."

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