UPDATED: April 21, 10:58 A.M. ET
Earlier this month, The Root reported on community advocates who penned a March letter to New York City Mayor Eric Adams and Comptroller Brad Lander urging them not to award a contract for municipal deposits to Wells Fargo. The bank, which has a history of discriminatory practices towards Black and Hispanic borrowers, was one of 30 banks competing to host the city’s payroll and other accounts.
The mayor and comptroller responded to the growing calls for disengagement with an April 8 letter to Wells Fargo CEO & President indicating that the city would not open any new accounts with the bank until they get it right. This week, The Root spoke exclusively with New York City Comptroller Brad Lander to learn more about the stance the city is taking with the bank that has one of the worst records of discrimination against Black borrowers.
In case you haven’t been following this story, a recent Bloomberg report indicated that Wells Fargo rejected more than half of the refinancing applications received by Black homeowners in 2020, while approving over 70 percent of the applications received by whites. This disturbing data caused the mayor and comptroller to consider putting the city’s money elsewhere.
“It’s immensely frustrating that here we are again with one more example of discrimination against Black borrowers,” Lander said. The mayor and I felt it was important to take a quick and clear step to say we’re not going to put the deposits of New York City taxpayers – which include Black New Yorkers – in Wells Fargo until they get right.”
Lander noted that Wells Fargo was removed from the city’s designated banking list in 2017, making them ineligible to receive new city contracts when they received a Community Reinvestment Act rating of “Needs Improvement.” However, they were reinstated in 2021 under the DeBlasio administration when their rating improved. He added that while Wells Fargo isn’t the only bank that engages in discriminatory practices, it is one of the worst offenders. “It just leads to a level of anger that we should all have about discrimination. But there is also a real frustration that, despite everybody saying [discrimination is] wrong and we’re going to do something about it, this is still where we are,” he says.
When asked if he thinks the city’s action will send a message to Wells Fargo, Lander is both hopeful and sympathetic to Black borrowers who may be skeptical that anything will change. “I think having the biggest city in the country take this kind of stance is pretty serious,” he says.
Lander says Wells Fargo has reached out to his office, the mayor and other community advocates. They have also started to put some new proposals in place, like the Special Purpose Credit Program. The program is a $150 million commitment to help minority homeowners with Wells Fargo mortgages lower their mortgage rates and reduce refinancing costs.
Lander adds that the ultimate goal is to see change in lending practices, something he says will require open and honest communication. “So far, [Wells Fargo has] made clear that it’s important to address the issue, and we’ve been clear that we’ll make room. We think that needs to be a real public dialogue in which they show which steps they have taken to make change here. And that’s what we’re eager to see.”
After publishing our interview with the comptroller, Wells Fargo reached out to The Root with a response. Their statement reads in part:
“We are deeply disappointed that Mayor Adams and Comptroller Lander would publish a press release like this based solely on a news report. More specifically, we are deeply disturbed by irresponsible allegations of discrimination that we believe do not stand up to scrutiny. We are confident that we follow relevant GSE guidelines in our decision making and that our underwriting practices are consistently applied regardless of a customer’s race or ethnicity. We do not believe that these claims are based on factual analysis.
We welcome the opportunity to correct the record with city officials. In 2021, Wells Fargo was the largest bank lender of purchase and refinances to Black families and this is consistent with our performance over the last decade (2011 – 2020), in which Wells Fargo helped as many Black families purchase homes as the next three largest bank lenders combined. “