WASHINGTON — The Department of Housing and Urban Development is investigating whether Wells Fargo violated fair-lending laws through programs intended to increase homeownership among Black Americans and other minorities
HUD sent a letter Wednesday to Wells Fargo CEO Charlie Scharf outlining the inquiry, according to a copy reviewed by the Journal. The agency alleged the bank had adopted a strategy of “sorting” homeowners and offering different products or terms based on race, according to the Wall Street Journal.
HUD Secretary Scott Turner said he plans a full investigation into the bank’s statements. The agency also is reviewing similar initiatives at other banks, a senior HUD official told the Journal.
Wells Fargo did not immediately comment Wednesday, the newspaper reported.
A Decade Of Commitments
The inquiry targets commitments Wells Fargo made over nearly a decade to expand homeownership among Black Americans.
In 2017, the bank pledged $60 billion in lending to help add at least 250,000 Black homeowners by 2027, according to the Journal.
Wells Fargo expanded its efforts in 2022, committing its own money to refinance homes owned by minority borrowers. That followed a Bloomberg report that the bank had rejected half of the refinancing applications submitted by Black families in 2020.
“These efforts are an important next step and will help close the homeownership gap between white and minority families created by decades of systemic inequities,” Wells Fargo said in 2022.
The bank broadly scaled back its mortgage business in early 2023 to focus on existing customers, but reiterated its commitment to advancing racial equity in housing, the Journal reported.
By the time Wells Fargo commissioned a racial-equity assessment in late 2023, it had fulfilled about 40% of its original $60 billion lending commitment. It also had helped about 5,100 customers refinance, generating average monthly payment savings of about $100, according to the newspaper.
Wells Fargo has since removed that assessment from its website and stopped publicly discussing its racial-equity initiatives, the Journal reported.
Scrutiny Of Race-Based Initiatives
Trump administration officials are examining whether the bank’s efforts violated the Fair Housing Act, according to the Journal. The investigation has not established a violation.
“Even if Wells Fargo did not violate the law, its practice of dividing Americans based on race is immoral, unethical and un-American,” Turner said.
The inquiry comes amid broader administration scrutiny of corporate diversity, equity and inclusion programs, including Justice Department investigations into whether government contractors violated antifraud laws through practices the administration has characterized as unlawful.
IBM and Deloitte paid multimillion-dollar penalties last year to resolve claims that they defrauded the government by considering diversity in hiring, promotion and staffing decisions, the Journal reported.
The administration also has sought evidence of “debanking,” or the closure of accounts belonging to businesses and individuals in politically controversial industries, including fossil fuels and firearms.
Many companies have retreated from diversity commitments since Trump’s 2024 election, removing references from websites and investor disclosures, according to the Journal.
The homeownership gap remains substantial. In 2024, 46% of Black households owned their homes, compared with 73% of white households, according to Pew Research Center figures cited by the newspaper.
