What happened: 2012 DOJ fair-lending settlement
On July 12, 2012, the Justice Department announced a settlement of allegations that Wells Fargo discriminated against qualified African-American and Hispanic borrowers from 2004 through 2009. The consent order required a $125 million settlement fund for wholesale borrowers plus $50 million in down-payment assistance—the “more than $175 million” headline on DOJ’s own release. That same release described $184.3 million in wholesale-borrower compensation; this file keeps the consent-order $125 million + $50 million as the court-filed amounts. About 4,000 wholesale borrowers were alleged to have been steered into subprime loans from 2004–2008; about 30,000 were alleged to have been charged higher fees and rates from 2004–2009.
What happened: 2020 Black refinance gap
Bloomberg reported on March 11, 2022, that Wells Fargo approved 47% of completed 2020 Black refinance applications versus 72% for White applicants, and was the only major lender that rejected more Black refinance applicants than it accepted. That is a journalistic analysis of HMDA data, not a court finding.
The Cookout read
Reason for concern. A landmark fair-lending settlement about Black and Hispanic borrowers sits on the same file as a later, still-disputed Black refinance gap. Settlement money is not a finding that the problem ended.