California Attorney General Xavier Becerra filed a brief Thursday in support of Oakland's lawsuit against Wells Fargo, alleging that the bank illegally discriminated against minority borrowers.
Oakland alleged in 2015 that Wells Fargo issued riskier, higher-cost mortgages to African Americans and Latinos and blocked them from refinancing. Minority borrowers were twice as likely to receive more expensive or risky loans compared with white customers, the city said.
The San Francisco company sought to dismiss the case, but last year a U.S. District Court judge ruled it could move forward. The Ninth U.S. Circuit Court of Appeals in San Francisco is reviewing the case.
"Equal access to housing starts with equal and fair access to our financial institutions," Becerra said in a statement. "For many African Americans and Latinos, the hardships of the mortgage crisis haven't stopped. Our fight for economic justice continues and I'm proud to stand with the city of Oakland in this effort to combat predatory lending in our state."
Wells Fargo, one of the largest U.S. mortgage lenders, denied the allegations.
"We continue to disagree with the city's accusations in this appeal and we are prepared to present strong arguments in support of our long history of fair and responsible lending in Oakland and across the country," said the bank.
Oakland alleged that Wells Fargo violated federal and state fair housing laws, hurt property values in local minority neighborhoods and reduced city revenue. Sacramento and Philadelphia have filed similar lawsuits against the bank.
Numerous scandals have engulfed the bank since the 2016 revelation that it opened millions of fake accounts to charge customers more fees. The bank settled national claims for $575 million last year, including $148.7 million for California. CEO Tim Sloan left the company in March, and the bank is searching for a replacement.
"Wells Fargo's racially discriminatory mortgage lending practices against African Americans and Hispanics have devastated individuals, families, and communities in Oakland, throughout California, and across the country where Wells Fargo operates, dramatically increasing foreclosures and decreasing the Black and Latino middle class," Barbara Parker, Oakland city attorney, said in a statement.
