The Consumer Financial Protection Bureau (CFPB) has warned Wells Fargo and other banks in the United States in a probe over mortgage pricing discrimination.
The CFPB launched an industrywide probe that looked into how mortgage bankers used loan discounts in 2022. The discounts, also known as pricing exceptions, are used by banks to help customers secure lower annual percentage rates (APR) in competitive markets. The investigation found that black and female borrowers got fewer pricing exceptions than other customers.
The CFPB has since sent Wells Fargo a "Matter Requiring Attention (MRA)" notice on problems with its mortgage discounts, as first reported by CNBC. The outlet noted that it is unclear whether the notice accused Wells Fargo of engaging in discriminatory practice or sloppy oversight.
The agency also sent MRAs to other lending practices in its investigation into fair lending violations. None of the other institutions were named.
In response to CNBC's report, Wells Fargo denied that it discriminates "based on race, gender or age or any other protected basis."
"As part of our renewed focus on supporting underserved communities through our Special Purpose Credit Program, we have spent more than $100 million over the last year to help more minority families achieve and sustain homeownership, including offering deep discounts on mortgage rates," a spokeswoman for the company added.
Wells Fargo's Previous Violations
Wells Fargo has incurred a number of fines related to home loans over the past years. In 2022, the bank agreed to pay $3.7 billion in penalties and damages over claims that it engaged in an array of banking violations over the last decade that harmed consumers.
Some of the violations outlined by the CFPB include failing to properly record customer payments on their home and auto loans, wrongfully repossessing the cars and homes of some borrowers, and charging overdraft fees even when customers had enough money to cover purchases they made using their bank cards.
In 2021, the bank was hit with a $250 million fine for "unsafe or unsound practices" related to its mortgage servicing business and for failing to address compliance risk issues that were raised in a 2018 consent order from the Officer of the Comptroller of the Currency (OCC).
