Wells Fargo Under Fire for Predatory Lending

Press Advisory
For Immediate Release:
April 14, 2005
Contact: Betsy Leondar-Wright
(617) 423-2148 x113

Wells Fargo Under Fire for Predatory Lending

Shareholders to Speak Up at Annual Meeting

On April 26, at the company's headquarters in San Francisco, Wells Fargo shareholders will vote on a resolution that links CEO pay to the company's progress on eliminating predatory lending practices, such as excessive fees, poor disclosure and interest rates that are higher than warranted by customers' credit scores.

The resolution was filed by members of Responsible Wealth (RW), a network of affluent investors. (The text of the resolution is available on the web at http://www.responsiblewealth.org/shareholder/2005/WellsFargo.html.)

A Wells Fargo customer harmed by predatory lending will present the resolution.

Since a similar resolution was put forth in 2004, Wells Fargo has met with representatives of Responsible Wealth and the Center for Responsible Lending (CRL) to discuss changes in their lending practices.

Nevertheless, the company has lagged behind other companies that have eliminated predatory practices. For instance, following a similar campaign by RW, CRL, and the Association of Community Organizations for Reform Now (ACORN), Citigroup agreed to cap fees, reduce prepayment penalties and ensure that all customers received rates appropriate to their credit history, regardless of which division of the company handles the loan application.

In contrast, Wells Fargo still charges six months' interest for loan prepayments before three years, a far greater penalty than is standard in the subprime lending industry. The company also charges customers with identical credit scores different rates, depending on the subsidiary with which they do business.

Responsible Wealth (http://www.ResponsibleWealth.org) is a project of United for a Fair Economy, a national, independent non-profit that spotlights growing economic inequality and advocates shared prosperity.