Turn On The Lights, Watch The Roaches Scatter Part 90

And yet another bank is settling up for pennies on the dollar as Wells Fargo admits it ripped off minority homeowners with higher broker fees to the tune of $175 million.

Wells Fargo, the nation’s largest home mortgage lender, has agreed to pay at least $175 million to settle allegations that its independent brokers discriminated against black and Hispanic borrowers during the housing boom, the Justice Department announced on Thursday. If approved by a federal judge, it would be the second largest residential fair-lending settlement in the department’s history.

An investigation by the department’s civil rights division found that mortgage brokers working with Wells Fargo charged higher fees and rates to more than 30,000 minority borrowers across the country than they did to white borrowers who posed the same credit risk, according to a complaint filed on Thursday along with the proposed settlement. 

Wells Fargo brokers also steered more than 4,000 minority borrowers into costlier subprime mortgages when white borrowers with similar credit risk profiles received regular loans, a Justice Department complaint found. The deal covers the subprime bubble years of 2004 to 2009. 

Thomas Perez, the assistant attorney general for the civil rights division, said the practices amounted to a “racial surtax,” adding: “All too frequently, Wells Fargo’s African-American and Latino borrowers had no idea they could have gotten a better deal — no idea that white borrowers with similar credit would pay less.” 

Nor did they know to ask.  Nor did the brokers tell them.  Thirty.  Thousand.  Minority borrowers were made to pay on average almost $3,000 more for the same exact loans.   But Republicans will tell you there is no economic racism, there is no need for a Consumer Financial Protection Bureau, there is no need for additional regulation of the financial sector, and there's certainly no need for the Justice Department's Civil Rights Division.

Lending data showed for example, that in 2007 customers in the Chicago area who borrowed $300,000 from Wells Fargo through an independent broker paid an average of $2,937 more in broker fees if African-American, and $2,187 more if Hispanic, compared to white borrowers with a similar credit risk, the complaint said. 

Similarly, it said, the data showed that nationwide, an African-American borrower who qualified for a regular loan was 2.9 times more likely to be steered into a subprime loan, and Hispanic borrowers was 1.8 times more likely, than were similarly creditworthy white borrowers. Subprime loans, which are designed for riskier borrowers, carry higher interest rates. 

The price of being black in America.  Add that to the tab.  But we elected a black President, so why are we complaining, right?  Why would we be so angry to see a major mortgage bank with millions of customers specifically and systematically discriminate by charging black and Latino customers more money?

The real question is why aren't Republicans furious with such an obvious failure of their vaunted free market principles.  You won't get an answer to that uncomfortable question.