ACORN Blasts Wells on Subprime Targeting

A community activist group has released a study maintaining that Wells Fargo conducts most of its subprime mortgage lending in minority and low-income neighborhoods.The Association of Community Organizations for Reform Now is also calling on the Federal Reserve Board to remove Wells Fargo chief executive Richard Kovacevich from its advisory board. "The Federal Reserve shouldn't take advice from predatory lenders," said ACORN president Maude Hurd. "Our study shows that Wells Fargo targets minority communities and others for abusive loans." The ACORN study, which relies on 2003 Home Mortgage Disclosure Act data, compares the lending activities of Wells Fargo's consumer finance unit, which makes mostly subprime mortgage loans, with those of its prime lending unit, Wells Fargo Home Mortgage. One of every four refinancings by Wells Fargo Financial is in low- and moderate-income communities, compared with one out of every 10 refis by WFHM. Meanwhile, one out of five Wells Fargo Financial loans are made in predominantly minority neighborhoods, compared with one out of 20 by WFHM. A Wells Fargo spokeswoman said the allegations are "totally false" and that ACORN's study is "flawed" and "should be dismissed." ACORN has been waging a campaign against Wells Fargo for the past two years to reform the company's lending practices.