Wells Fargo won an early round in a lawsuit accusing the bank of running a predatory mortgage lending scheme in the Atlanta area before the 2008 financial crisis and continuing to discriminate against minorities for more than a decade afterward.
A federal judge said a complaint filed by three Georgia counties in 2021 had to be dismissed because the Fair Housing Act only reaches back two years and the suit didn’t include enough specifics about alleged misconduct by the bank during that time period.
But the judge gave officials with Fulton, DeKalb and Cobb counties 30 days to revise and refile the case to provide more information, including names of borrowers and addresses of their properties.
The biggest bank mortgage lender is still grappling with legal fallout over how it treated Black and Hispanic borrowers in the run-up to the financial crisis. Meanwhile, it faces new lawsuits and congressional scrutiny over its
In last week’s ruling, U.S. District Judge Michael Brown in Atlanta rejected the bank’s argument that the three counties failed to adequately allege that Wells Fargo issued a disproportionate number of high-cost, subprime loans in minority neighborhoods, and that minorities were significantly more likely to be targeted for foreclosure than white borrowers.
The counties have shown the bank’s policies “were causally connected in a robust way to the racial disparity,” Brown wrote in his March 22 order.
Representatives for Wells Fargo had no immediate comment on the lawsuit. An attorney for the three counties declined to comment.
The case is among a slew of suits filed in the last decade by U.S. municipalities — including those in Chicago, Philadelphia, Miami and Oakland, California — that accused Wells Fargo, Bank of America, Citigroup, HSBC Holdings and JPMorgan Chase of violating the Fair Housing Act with discriminatory mortgage lending. Several cases have already been dismissed or narrowed.
The case is Fulton County, Georgia v. Wells Fargo & Co., 21-cv-01800, U.S. District Court, Northern District of Georgia (Atlanta).
— With assistance from Shawn Donnan.
