By Bill Dries
Wells Fargo & Co. has agreed to settle a federal discrimination lawsuit the Memphis and Shelby County governments filed against the bank by setting a five-year mortgage lending goal of $425 million here, including $125 million in home purchase lending to low- and moderate-income borrowers.
The city and county governments filed suit in Memphis Federal Court in December 2009 against Wells Fargo Bank, Wells Fargo Financial Tennessee Inc. and Wells Fargo Financial Tennessee 1 LLC, alleging the company discriminated against its African-American mortgage holders with refinancing that put the homes of those mortgage holders at risk.
Former Wells Fargo workers from Memphis were among those alleging the company specifically targeted black customers for the refinancing.
The $425 million goal is part of a multi-part settlement announced Tuesday, May 29, that includes the dismissal of the lawsuit with Wells Fargo admitting no wrongdoing.
A Wells Fargo spokesman described the agreement as a “dismissal,” making a distinction between that and a settlement.
Other parts of the settlement include $4.5 million in mortgage down payment and home renovation assistance grants. The grants are to be awarded for up to $15,000 each under guidelines of a Wells Fargo home ownership program.
The program is similar to the NeighborhoodLIFT program Wells Fargo has collaborated with the nonprofit NeighborWorks America program on in nine other U.S. cities.
Also included in terms of the settlement is another $3 million for local grants with the spending controlled by the city and county.