Wells Fargo (WFC) will pay at least $175 million to settle charges that it discriminated against black and Hispanic borrowers by steering them into subprime mortgages when they could have qualified for better rates, or by charging them higher rates. Wells Fargo denied the charges, saying that it “not only denies that it discriminated unlawfully, but affirmatively asserts that it has treated all of its customers without regard to race or national origin.”
Then why not fight the heinous accusations? The company said it wants to avoid “contested litigation with the DOJ.”
Wells also said it will no longer work with mortgage brokers. “Mortgages sold by independent brokers in this manner currently represent five percent of the Company�s home mortgage funded volume.”
In other news, the rest of the banking sector is falling even more drastically today ahead of a slew of earnings from big banks tomorrow and next week. On Friday, JPMorgan Chase (JPM) will release second quarter numbers and presumably show investors just how big its London Whale is, and Wells Fargo will also release earnings.
Citigroup (C) is leading the sector lower, dropping 2% in afternoon trading, with Bank of America (BAC) down 1.5%.
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