Bank / Credit Union

Regulators probe Wells Fargo for discrimination in mortgage pricing

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December 12, 2023

Regulators recently probed Wells Fargo and other banks for possible discrimination in mortgage pricing. The bank received an official notice from the Consumer Financial Protection Bureau in regards to its pricing exceptions discount, which is used to deliver mortgage deals in competitive markets, according to a report by CNBC.

Regulators claim that these discounts may violate fair lending laws by providing fewer exceptions for Black and female borrowers.

"As long as pricing exceptions exist, pricing disparities exist," Ken Perry, founder of a Washington-based compliance firm for mortgages, The Knowledge Coop, said in the report. "They're the easiest way to discriminate against a client."

"Like many in the industry, we take into consideration competitor pricing offers when working with our customers to get a mortgage," an unnamed bank spokeswoman said in a prepared statement. "As part of our renewed focus on supporting underserved communities through our Special Purpose Credit Program, we have spent more than $100 million over the last year to help more minority families achieve and sustain home ownership, including offering deep discounts on mortgage rates."

The bank also claimed it did not discriminate based on race, gender or age.

Wells Fargo has paid fines in the past for its mortgage policies. In 2012, it paid more than $184 million on claims it charged higher fees to minorities and gave them subprime loans and it has paid more than $3.7 billion this year for other consumer issues.