African-American borrowers who secured subprime mortgage loans from Wells Fargo and HSBC -- two of the nation's biggest banks -- were much more likely to receive higher interest rate loans than similarly-qualified white customers, according to two class action lawsuits filed late last week by the NAACP.
The class action lawsuits allege that the banking giants violated the Fair Housing Act, Equal Credit Opportunity Act, and the Civil Rights Act of 1866 in imposing race-based disparities in their mortgage lending practices. In a Press Release announcing the lawsuits, the NAACP declared that "African American homeowners who received sub-prime mortgage loans from these lenders were more than 30 percent more likely to be issued a higher rate loan than Caucasian borrowers with the same qualifications," and "upper income African Americans are more than twice as likely to receive higher cost loans as their lower income white counterparts." The class action lawsuits seek greater accountability and transparency in Wells Fargo and HSBC's lending practices and decisions.
According to the Los Angeles Times, both California-based Wells Fargo and London-based HSBC have "issued heated denials and said they would defend themselves aggressively," with HSBC delcaring that it "had received no 'substantive reply' when it tried on several occasions to discuss 'issues of concern' with the NAACP."