Post by RPankn on Dec 16, 2005 6:36:10 GMT -5
Wells Fargo Targeted over Charges of Predatory Lending
by Brendan Coyne
Dec 15 - Groups alleging that one of the nation’s wealthiest financial firms engages in discriminatory lending practices staged a picket at the company’s headquarters yesterday. [This is an akward sentence because predatory lending encompasses behavior that is much more than discriminatory in nature.] The groups are in a long-running campaign to force the firm to admit to and provide compensation for what critics term "predatory" lending. [Not sure why predatory is in quotes when that's what these practices essentially are.] The protest at Wells Fargo’s San Francisco offices garnered little media attention, but organizers considered it an important step toward wringing economic equity from the banking giant.
Yesterday’s demonstration was aimed at highlighting allegations that Wells Fargo routinely adds surprise charges to mortgages taken out by minorities, with many rates rising well above 10 percent. As of last week, the average mortgage rate in the nation’s largest cities hovered around 6.5 percent, according to the Associated Press. [It's not just minorities, but many WF customers, regardless of race or ethnicity. This is one area where mortgage lenders truly practice equality, blind of race, in that they don't discriminate against who they steal from.]
Company shareholders and community activists reportedly joined the Association for Community Reform Now (ACORN) in picketing Wells Fargo’s headquarters, as did members of Responsible Wealth, a philanthropic group, and the Community Reinvestment Association of North Carolina (CRA-NC), an advocate for wealth equality. The latter two groups have been negotiating with Wells Fargo over reforming its lending practices for most of the year, leading to minor concessions on payment penalties and other issues. [Personally, I'd pursue a different tactic, which would be the corporate death penalty and jail for the company officers and employees involved; these banks only behave when they're being watched and go right back to their old practices when they think it's safe to. This is well within the Federal government's power, too, since they grant the corporate charters to these banks.]
"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," ACORN President Maude Hurd said in a statement. "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."
Nationally, black Wells Fargo borrowers are nearly four times as likely to pay extraordinary loan rates as whites, according to information compiled by Responsible Wealth. Nearly 30 percent of blacks taking out first-year loans from the company pay high interest rates. [This is true for all subprime lenders.]
Facing the rising tide of dissent over purportedly racist lending practices this summer, Wells Fargo head Richard Kovacevich told Bloomberg news: "We are responsible lenders, and we price for risk; we don't price for race. We don't do predatory lending. And the American consumer is better off that we take that risk. We just have to get paid for it."
A CRA-NC study of loans taken out in North Carolina in 2004 found that blacks as a whole were four-and-a-half times more likely to incur high loan rates as whites. Acknowledging that income and credit-history factors could play into the disparity, the group called on banks to release data backing their contention that the difference is solely based on economic factors.
Last year, ACORN filed two lawsuits in one month against Wells Fargo alleging that it unfairly adds surcharges to loans to minority homebuyers and misleads many into accepting usurious rates on second mortgages. The suits have not been resolved. [On top of several class actions pending against WF for its predatory practices.]
According to the Center for Responsible Lending, financial institutions obtain more than $25 billion a year from low-income borrowers through mortgages, tax-return and payday loans, credit-card-debt consolidation schemes and other poorly regulated areas of finance. At least $9.1 billion coming from mortgages alone, the Center reports.
Only four states – New York, Illinois, Arkansas and South Carolina – have laws on the books that actively protect consumers from predatory mortgages, according to information provided by CRL. About half of all states have anti-abusive-lending laws. [Huh? North Carolina has some of the best laws against predatory lending in the origination of mortgage loans, as does Oakland, CA. What happens after is another matter, and an area where the Feds and states could sorely improve.]
Presently, there are no federal regulations specifically aimed at curbing abusive lending practices. The Treasury Department offers consumers advice on how to avoid and report such practices. [Huh? Did they do any fact checking for this article because Treasury has regulatory authority through the Office of Thrift Supervision and the Office of the Comptroller of the Currency. But these are revolving doors for banking types, so enforcement is rare. And there are Federal laws aimed at subprime lenders: TILA and HOEPA. But each is so weak and full of loopholes they may as well be nonexistant.]
© 2005 The NewStandard.
newstandardnews.net/content/index.cfm/items/2679
by Brendan Coyne
Dec 15 - Groups alleging that one of the nation’s wealthiest financial firms engages in discriminatory lending practices staged a picket at the company’s headquarters yesterday. [This is an akward sentence because predatory lending encompasses behavior that is much more than discriminatory in nature.] The groups are in a long-running campaign to force the firm to admit to and provide compensation for what critics term "predatory" lending. [Not sure why predatory is in quotes when that's what these practices essentially are.] The protest at Wells Fargo’s San Francisco offices garnered little media attention, but organizers considered it an important step toward wringing economic equity from the banking giant.
Yesterday’s demonstration was aimed at highlighting allegations that Wells Fargo routinely adds surprise charges to mortgages taken out by minorities, with many rates rising well above 10 percent. As of last week, the average mortgage rate in the nation’s largest cities hovered around 6.5 percent, according to the Associated Press. [It's not just minorities, but many WF customers, regardless of race or ethnicity. This is one area where mortgage lenders truly practice equality, blind of race, in that they don't discriminate against who they steal from.]
Company shareholders and community activists reportedly joined the Association for Community Reform Now (ACORN) in picketing Wells Fargo’s headquarters, as did members of Responsible Wealth, a philanthropic group, and the Community Reinvestment Association of North Carolina (CRA-NC), an advocate for wealth equality. The latter two groups have been negotiating with Wells Fargo over reforming its lending practices for most of the year, leading to minor concessions on payment penalties and other issues. [Personally, I'd pursue a different tactic, which would be the corporate death penalty and jail for the company officers and employees involved; these banks only behave when they're being watched and go right back to their old practices when they think it's safe to. This is well within the Federal government's power, too, since they grant the corporate charters to these banks.]
"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," ACORN President Maude Hurd said in a statement. "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."
Nationally, black Wells Fargo borrowers are nearly four times as likely to pay extraordinary loan rates as whites, according to information compiled by Responsible Wealth. Nearly 30 percent of blacks taking out first-year loans from the company pay high interest rates. [This is true for all subprime lenders.]
Facing the rising tide of dissent over purportedly racist lending practices this summer, Wells Fargo head Richard Kovacevich told Bloomberg news: "We are responsible lenders, and we price for risk; we don't price for race. We don't do predatory lending. And the American consumer is better off that we take that risk. We just have to get paid for it."
A CRA-NC study of loans taken out in North Carolina in 2004 found that blacks as a whole were four-and-a-half times more likely to incur high loan rates as whites. Acknowledging that income and credit-history factors could play into the disparity, the group called on banks to release data backing their contention that the difference is solely based on economic factors.
Last year, ACORN filed two lawsuits in one month against Wells Fargo alleging that it unfairly adds surcharges to loans to minority homebuyers and misleads many into accepting usurious rates on second mortgages. The suits have not been resolved. [On top of several class actions pending against WF for its predatory practices.]
According to the Center for Responsible Lending, financial institutions obtain more than $25 billion a year from low-income borrowers through mortgages, tax-return and payday loans, credit-card-debt consolidation schemes and other poorly regulated areas of finance. At least $9.1 billion coming from mortgages alone, the Center reports.
Only four states – New York, Illinois, Arkansas and South Carolina – have laws on the books that actively protect consumers from predatory mortgages, according to information provided by CRL. About half of all states have anti-abusive-lending laws. [Huh? North Carolina has some of the best laws against predatory lending in the origination of mortgage loans, as does Oakland, CA. What happens after is another matter, and an area where the Feds and states could sorely improve.]
Presently, there are no federal regulations specifically aimed at curbing abusive lending practices. The Treasury Department offers consumers advice on how to avoid and report such practices. [Huh? Did they do any fact checking for this article because Treasury has regulatory authority through the Office of Thrift Supervision and the Office of the Comptroller of the Currency. But these are revolving doors for banking types, so enforcement is rare. And there are Federal laws aimed at subprime lenders: TILA and HOEPA. But each is so weak and full of loopholes they may as well be nonexistant.]
© 2005 The NewStandard.
newstandardnews.net/content/index.cfm/items/2679