Wells Fargo Shareholders: “Face Up to Race Gap”

Wells Fargo Shareholders: “Face Up to Race Gap”

Borrowers Team Up With Shareholders at Annual Meeting

Seventeen Wells Fargo shareholders, who are also Responsible Wealth members, have given up their proxies so that customers can present their complaints about overpriced loans to the Board, management and shareholders at the annual meeting on April 25 in San Francisco.

While these customers press shareholders to vote for a resolution inside, picketers outside will be wearing shark costumes, carrying inflatable sharks and handing out multi-colored gummy sharks as they ask Wells Fargo to explain the racial disparities in the cost of its loans. The annual meeting will be at the Stanford Court Hotel at 905 California Street at 1:30 pm. The shark picket outside will begin at 12:30.

“As an owner of Wells Fargo, I want to know that the profits I make from this business do not come at the cost of increasing the racial wealth divide, and prevent hard-working people from climbing up the ladder of success,“ said Marnie Thompson, a shareholder, customer and Responsible Wealth member.

Responsible Wealth and the Association of Community Organizations for Reform Now (ACORN) have been running a national campaign against Wells Fargo’s predatory practices for three years. As a result, the company has changed certain lending policies, such as reducing prepayment penalties and eliminating mandatory arbitration.

“We are glad that Wells Fargo has finally acknowledged the damage that their practices have been causing and has agreed to change some of them, “ said
Maude Hurd, ACORN’s national president. “However, Wells still needs to compensate the families and communities its predatory lending has hurt, and to address the serious racial inequality in its lending.”

Last year, ACORN published an analysis of Wells Fargo’s Home Mortgage Disclosure Act (HMDA) report, which for the first time required disclosure of interest rates on their high rate mortgages. The analysis specifically looked at Wells Fargo’s conventional first-lien mortgages. It found that 29.5% of mortgage loans made to African-Americans and 12.6% of loans to Latinos were high-cost, compared to only 7.6% of loans to whites.

African-Americans were 3.9 times more likely than whites to receive a high cost loan. Latinos were 1.7 times more likely than whites to receive a high cost loan.

“They say race is not a factor in their pricing. So how do they explain these numbers?,” asked Anisha Desai, Program Director for United for A Fair Economy.

Because Wells Fargo claims that the HMDA report does not tell the whole story, RW and ACORN are asking the bank to explain the rest of the story.

The resolution, filed by Responsible Wealth members, Amnesty International USA, and the Unitarian Universalist Service Committee, would require the company to explain the racial and ethnic disparities in the cost of its loans. The full text of the resolution is online at
http://www.responsiblewealth.org/shareholder/2006/WF-MortgageLending.html

While Wells Fargo claims they do not tolerate discrimination, they have also blocked attempts including investigations and consumer protection legislation to disclose more information. For instance, they led the pack in blocking Attorney General Spitzer’s request for voluntary disclosure of loan conditions and anonymous credit scores used to determine loan pricing.

Wells Fargo also challenged the filing of this resolution before the Securities and Exchange Commission (SEC). The SEC ruled in favor of the shareholders.

“If there’s nothing to hide, then why hide?,” contends Scott Klinger, a consultant for United for a Fair Economy. “Their response amounts to ”˜Trust us’. Clearly the SEC didn’t buy that argument, and neither do we.”

Responsible Wealth is a national network of businesspeople, investors and affluent Americans who are concerned about deepening economic inequality and are
working for widespread prosperity.

ACORN (www.acorn.org) is the nation’s largest community organization of low- and moderate-income families, with over 150,000 member families organized into 800 neighborhood chapters in 80 cities across the country. Since 1970 ACORN has taken action and won victories on issues of concern to its members.

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