The Trump administration on Wednesday revealed it is investigating one of the country’s largest banks over whether it illegally favored minorities through DEI initiatives encouraging “racial equity” in homeownership.
The Department of Housing and Urban Development informed Wells Fargo in a letter that it would examine whether the bank violated fair-lending laws, such as the Fair Housing Act, by offering certain programs to black people. Wells Fargo has for years offered such initiatives, including a 2022 program that allocated $210 million as part of an effort to help black clients lower their mortgage rates and reduce their refinancing costs because of “systemic inequities” the bank said have “prevented too many minority families from achieving their homeownership and wealth-building goals.”
“Even if Wells Fargo did not violate the law, its practice of dividing Americans based on race is immoral, unethical and un-American,” HUD Secretary Scott Turner said, according to the Wall Street Journal. “Wells Fargo and all of its employees that engaged in race-based decision-making should be ashamed of themselves.”
The development marks the Trump administration’s latest effort to target diversity, equity, and inclusion programs it has often warned could violate civil rights laws. Federal agencies from the Pentagon to the State Department have sought to end DEI programs within their departments, while the Justice Department has targeted prestigious colleges that receive federal funding for violating civil rights by considering race as a factor in admissions.
In its letter, HUD said Wells Fargo had adopted a strategy of “sorting” homeowners and offering different products or terms based on their race.
In an effort touted as “unprecedented in the mortgage lending space in the United States,” Wells Fargo in 2017 announced it would set aside $60 billion to lend to at least 250,000 black homeowners by 2027. The bank also pledged to make its home lending sales team more diverse.
“We were looking at homeownership rates in America which had been declining since 2007, and African-Americans in particular were hit hard so we felt like we could do something about it,” Brad Blackwell, executive vice president and head of housing policy and homeownership growth strategies for Wells Fargo, said at the time.
In 2023, Wells Fargo said it would invest an additional $100 million “to advance racial equity in homeownership,” including strategic partnerships with non-profit organizations and community-focused engagements.
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The bank said that year it expected “to make ongoing investments in this area in the years to follow,” while pledging to deploy additional Home Mortgage Consultants in local minority communities.
The Washington Examiner reached out to HUD for comment. Wells Fargo declined to offer a comment.