The National Association for the Advancement of Colored People (NAACP) is accusing Wells Fargo and HSBC of forcing blacks into subprime mortgages while whites with identical qualifications got lower rates. Class-action lawsuits were to be filed against the banks on Friday in a federal court in Los Angeles,NAACP co-lead counsel Austin Tighe said.
Black homebuyers have been three-and-a-half times more likely to receive a subprime loan than white borrowers,and six times more likely to get a subprime rate when refinancing,Tighe said. Blacks still were disproportionately steered into subprime loans when their credit scores,income and down payment were equal to those of white homebuyers,he said.
Melissa Murray,vice president of corporate communications for Wells Fargo,called the lawsuit totally unfounded and reckless. The bank is receiving federal bailout funds. We have never tolerated,and will never tolerate,discrimination in any way,shape or form in any of our business practices,products,or services, Murray said. HSBC said it does not comment on litigation. HSBC stands by its fair lending and consumer protection practices,and we are confident that we are treating our customers fairly and with integrity, said Neil Brazil,vice president for public affairs.
Similar NAACP lawsuits are pending against a dozen other subprime lenders. This is systematic,institutionalised racism, Tighe said. The only difference between the borrowers is the color of their skin.