The United States Department of Housing and Urban Development opened an investigation into Wells Fargo initiatives intended to increase Black homeownership. HUD said on 7 October that the programmes may violate the Fair Housing Act. The inquiry is examining whether the bank favoured Black or other minority homeowners through products or terms based on race. The investigation has not established that Wells Fargo broke the law.
HUD sent its investigation letter to Wells Fargo chief executive Charlie Scharf, according to the Wall Street Journal, which reviewed a copy. The bank did not provide an immediate comment to the Journal and later declined to comment to Reuters. The agency publicly confirmed the investigation after those reports. HUD also said it was reviewing similar initiatives at other banks, according to a senior official cited by the Journal.
PAST COMMITMENTS COME UNDER NEW SCRUTINY
Wells Fargo said in 2017 that it would commit $60 billion in lending to help add at least 250,000 African American homeowners by 2027. It expanded its efforts in 2022 to include refinancing support for minority homeowners. The bank reduced its wider mortgage operation in early 2023 but reiterated its commitment to advancing racial equity in housing.
HUD alleged in its letter that the bank had adopted a strategy of sorting homeowners and offering different products or terms by race. Agency officials argued that describing an initiative as a special-purpose credit programme would not exempt discriminatory conduct from fair-housing law. Those statements set out HUD's position at the start of the inquiry rather than a concluded legal finding.
INVESTIGATION MUST TEST PROGRAMME DESIGN AND DELIVERY
The Journal reported that Wells Fargo had completed about 40% of its original $60 billion lending commitment when it commissioned a racial-equity assessment in late 2023. It had also helped about 5,100 customers refinance, with average monthly savings of roughly $100, according to the report. Those figures describe the programme's reach but do not determine whether particular eligibility rules or offers complied with the Fair Housing Act.
The next steps will depend on HUD's review of the bank's programme documents, lending criteria and treatment of applicants. Wells Fargo may also provide a substantive response after declining immediate comment. Any enforcement consequence would require further agency action, and the opening of the investigation should not be treated as proof of a violation.