One of the biggest banks in the US, Wells Fargo, has agreed to pay $175m to settle allegations it charged higher mortgage rates and fees to Black and Latino customers. Discriminatory lending practices in the banking industry left Black and Latino neighbourhoods blighted by foreclosures after the housing bubble burst.
A government investigation found tens of thousands of cases of African Americans and Hispanics being charged more than White customers with similar credit profiles. The settlement is the second-biggest of its kind; the Bank of America paid $335m over similar charges. But in both cases, the banks were allowed to deny any wrongdoing.
And to add insult to injury, just a day after the settlement, Wells Fargo announced second quarter profits of $4.6bn, which is 26 times the amount it agreed to pay out. Are banks being sufficiently discouraged from wrongdoing?
Joining Al Jazeera's Inside Americas to discuss this are guests: Jordan Estevao, the director of the Bank Accountability Program at National People's Action, a community direct action group; Edward Wyckoff Williams, a political analyst and former investment banker; and Richard Wolff, a professor of economics at the University of Massachusetts-Amherst.
© Al Jazeera
Financial Watchdog Targets Discriminatory Lenders
Many conservative politicians and banks have been critical of the CFPB, which was created in 2010 as part of the Dodd-Frank Wall Street Reform Act but was not officially opened until the summer of 2011. These critics say the lending industry, necessary for a complete economic recovery, will be stifled by too much regulation.
The newly-opened CFPB publicized Wednesday that it will next target discriminatory lenders that treat women and minorities unfairly, whether the discrimination is meant or not. Resource for this article: Financial watchdog targets discriminatory lenders.