Business

NAACP lawsuit says Wells Fargo, HSBC discriminated against Blacks

(NNPA) – The NAACP is accusing Wells Fargo and HSBC of forcing Blacks into subprime mortgages while whites with identical qualifications got lower rates.

Class-action lawsuits were filed against the banks on Friday March 13 in federal court in Los Angeles, said Austin Tighe, co-lead counsel for the National Association for the Advancement of Colored People. According to a statement released by the civil rights organization, “These lawsuits allege systematic, institutionalized racism in sub-prime home mortgage lending.”

Tighe said, “Black homebuyers have been 3 1/2 times more likely to receive a subprime loan than white borrowers, and six times more likely to get a subprime rate when refinancing…Blacks still were disproportionately steered into subprime loans when their credit scores, income and down payment were equal to those of White homebuyers.”

Both Wells Fargo & Co. and HSBC are receiving federal bailout funds.

Similar NAACP lawsuits are pending against a dozen other subprime lenders.

”This is systematic, institutionalized racism,” Tighe said. ”Once you take out factors relative to income and credit risk, the only difference between the borrowers is the color of their skin.”

Tighe estimated that ”tens of thousands” of Blacks had been forced into bad loans, but said it was difficult to gauge the scope of the problem because banks keep much of their internal data private. The lawsuits could force banks to divulge closely guarded information, such as how banks can determine the race of a loan applicant and how federal bailout funds are being spent.

The NAACP is seeking reforms from the banks such as increased transparency in the loan process, educational outreach and internal training.

Information from the Associated Press contributed to this report.

March 19, 2009
ABOUT INSIGHT NEWS
The Journal For Community News, Business and The Arts serving the African American community in Minneapolis-St.Paul. Available on news stands and online at insightnews.com.
INSIGHT NEWS

1815 Bryant Ave N, Minneapolis, MN 55411
insightnews.com
(612) 588-1313

ADVERTISING

Download our Media Kit (PDF file, requires Adobe Acrobat Reader)

Newspaper Deadlines
-Classified: Ad inquiries due one week prior to run date Wednesday
-Display: Space reservation due one week prior to run date and material due Wednesday the week prior to run date.
-Insight News print edition is published weekly on Mondays

For more information call: 612.588.1313

CONVERSATiONS W/ AL MCFARLANE