Wells Fargo Challenged on Racial Inequities

FOR IMMEDIATE RELEASE

April 25, 2008

Wells Fargo Asked to Account for Racial Inequities in its High-Cost, Sub-Prime Loans

At Wells Fargo & Company's annual meeting on April 29 in San Francisco, members of Responsible Wealth, a national network of businesspeople, investors and affluent Americans, will present a shareholder resolution requesting that the company explain racial and ethnic disparities in its sub-prime loans.

"Buying a home has been the key to joining the middle class in this country, but it's being stolen from many by lenders who prey on vulnerable low-income, minority and elderly borrowers," said Julie Goodridge, a member of Responsible Wealth and owner of NorthStar Asset Management, Inc. of Boston, which filed the resolution on behalf of Responsible Wealth.

Wells Fargo's Home Mortgage Disclosure Act (HMDA) report for 2006 shows a substantial increase in high-cost, subprime loans, with 45.8% of its conventional first-lien mortgage loans to African-Americans being high-cost and 22.6% of loans to Latinos being high-cost, compared to only 12.4% of loans to whites. This means that African-Americans were 3.69 times more likely than whites and Latinos were 1.82 times more likely than whites to receive a high-cost loan from Wells Fargo in 2006.

For the mortgage industry as a whole, racial bias in high-cost loans has been rampant. A report from United for a Fair Economy, in January 2008, detailed racial disparities in expected losses from foreclosure of subprime loans made during the past eight years.

Responsible Wealth has been challenging Wells Fargo's predatory practices for five years. As a result, the company has changed certain lending policies, such as reducing prepayment penalties and eliminating mandatory arbitration.

The resolution, filed by NorthStar Asset Management on behalf of Responsible Wealth, asks the company to prepare a report explaining the racial and ethnic disparities in the delivery of its high-cost, sub-prime loans. The resolution also asks the company to consider whether "the company's racial and ethnic disparities in high-cost loans affect the home affordability or wealth-building benefits of homeownership for its minority customers."

The full text of the resolution is online at:
http://faireconomy.org/news/wells_fargo_shareholder_resolution_2008

Responsible Wealth, a project of United for a Fair Economy, is a national network of businesspeople, investors and affluent Americans who are concerned about deepening economic inequality and using their influence to advocate for widespread prosperity.

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