Tuesday, May 8, 2012

Wells Fargo faces fair lending investigation

Wells Fargo & Co. is under investigation for potential violations of fair lending laws in its mortgage origination, the bank disclosed Tuesday in its quarterly report.

The U.S. Department of Justice has told the bank that it believes it can bring charges against Wells Fargo seeking monetary and civil damages, the bank said. Fair lending laws prohibit discrimination against minority homebuyers.

"We believe such claims should not be brought and continue seeking to demonstrate to the Department of Justice our compliance with fair lending laws," the bank stated in the report.

In December, Bank of America settled with the Department of Justice for $355 million over alleged fair lending violations. The justice department said that the Countrywide Financial Corp., which the Charlotte bank bought in 2008, steered black and Hispanic homebuyers into costlier mortgages and charged them higher fees.