Wells Fargo sued over alleged modern-day redlining practices

Such discriminatory practices, the litigation firm asserted, is a “modern form of redlining or refusal to insure mortgages in and near Black neighborhoods, delay and/or denial to refinance loans at lower interest rates for Black homeowners, and the high rate of rejection of credit applications from qualified Black Americans through automated algorithms and machine learning systems.”

“Reflecting its sordid history of racial bias, Wells Fargo reached this disproportionate level purposefully,” said Dennis Ellis, lead counsel for the individual plaintiff and the proposed class. “It did so through its brazen use of multiple intentionally discriminatory algorithms and other race-driven lending practices, the disparate impact of which it either promoted or chose to ignore.”

A recent Bloomberg investigation found that Wells Fargo approved only 47% of Black applicants for refinancing in 2021, compared with 79% of White borrowers. On average, other banks accepted 71% of Black applicants. The refinancing disparities have forced Black homeowners to pay more than non-Black homeowners, resulting in foreclosure in many cases, alleges the lawsuit.