Baltimore Sues Wells Fargo

The city of Baltimore has filed a fair-lending lawsuit against Wells Fargo Bank NA, contending that the San Francisco-based bank's subprime lending practices have led to high foreclosure rates in minority neighborhoods and cost the city millions of dollars in expenses and lost revenues. The city alleges that Wells Fargo targets African-American neighborhoods with high-cost loans, resulting in an 8.2% foreclosure rate, compared with a 2.1% foreclosure rate in predominantly white neighborhoods. "Wells Fargo has caused these foreclosures by targeting Baltimore's African-American neighborhoods for irresponsible and abusive subprime lending practices designed to maximize short-term profits for the bank," Mayor Sheila Dixon said. A Wells Fargo spokesman said its loan pricing is based on risk. "Race is not a factor in our pricing," he said. City attorneys are asking a U.S. district court to enjoin Wells Fargo from engaging in certain lending practices and to award compensatory and punitive damages. The city has retained Relman & Dane, a civil rights law firm in Washington, to work on the case.