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ACORN Sets Sites on Wells Fargo

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ACORN At It AgainOrganization aims to remove Wells executive from advisory council

March 10, 2005

By COCO SALAZAR

 

In its ongoing assault of Wells Fargo, ACORN now aims to remove the lender’s chief executive from a government advisory council after a study of the lender’s loans reaffirmed its position that Wells engages in predatory lending. But Wells says the study is flawed and questions ACORNs credibility.

The Association of Community Organizations for Reform Now announced its study of Wells’ refinance loans in 42 metropolitan areas showed “a huge racial and economic disparity between the company’s prime mortgage lending and its higher-cost subprime lending.”

Based on these findings, ACORN members called on the Fed Tuesday to oust Wells CEO Richard Kovacevich from its Advisory Council, according to the announcement.

“The Federal Reserve shouldn’t take advice from predatory lenders,” said ACORN president Maude Hurd in the announcement. “Our report shows that Wells Fargo targets minority communities and others for abusive loans. We are stepping up the pressure against Wells Fargo and we will continue to do so until they change their ways.

“The allegation that we somehow target neighborhoods for nonprime loan products is totally false and 100 percent contrary to our ethical standards and business practices,” Wells spokesman Lynn Greenwood said in an e-mailed statement.

ACORNs study, The Runaway Stagecoach: Racial and Economic Inequality in Wells Fargo’s Subprime Lending, is reportedly based on 2003 Home Mortgage Disclosure Act data and compares the lending patterns of the bank’s subprime unit, Wells Fargo Financial, and the prime lending unit, Wells Fargo Home Mortgage.

One out of every five refinance loans made by the subprime unit is in minority neighborhoods, versus one out of every 20 by the prime lender, according to the report.

Data also revealed that 27% of refinancings originated by Wells Fargo Financial were in low and moderate-income neighborhoods, compared to 10% by the prime lender, the report said.

“The alleged research report, which was produced by an organization with a history of deliberately distorting and misrepresenting our practices and policies, is filled with inaccuracies about our practices,” Greenwood said. “This study’s methodology is so flawed and the report ignores so many important factors, such as the credit risk-based differences among our many valued mortgage customers, that its conclusions should be dismissed.”

ACORN started a campaign against Wells in May 2003 calling for the bank to straighten its lending practices. Since then, the CEO of the subprime unit resigned shortly after and ACORN has rallied and filed lawsuits against the San Francisco-headquartered bank.

Related:

Wells Fights Back
ACORN’s public demonstrations and lawsuits against Wells Fargo are “deliberate attempts to distort and misrepresent our business practices and procedures,” according to a company executive. The lender, which has been under increasing pressure by ACORN to change its lending practices, pointed to cases where it helped borrowers even as it was accused of harming them.
click here to read article

ACORN Continues Assault on Wells
More than 2000 rally participants will converge in Los Angeles today to protest alleged predatory practices by one of the country’s biggest mortgage lenders. The rally coincides with the planned filing of a nationwide lawsuit by consumer advocate group ACORN — which accuses the company of not informing borrowers they might qualify for a better rate.
click here to read article

Class Action Against Wells Focuses on Illinois High Cost Loans
A class action lawsuit has been filed against Wells Fargo Financial on behalf of Illinois borrowers. The case, which focuses on high cost loans, challenges the federal government’s preemptive authority to regulate the nation’s financial institutions.
click here to read article

Group Attacks Wells Fargo
Numerous members of a prominent anti-predatory lending organization will attend Wells Fargo & Co.’s annual shareholder meeting Tuesday to protest against alleged subprime predatory lending practices, and additionally propose a resolution to tie executives’ multimillion-dollar pay with their efforts to end such acts.
click here to read article

ACORN Sets Sites on Wells Fargo
A consumer advocacy group started a campaign Monday against financing giant Wells Fargo.

 


Coco Salazar is an assistant editor and staff writer for MortgageDaily.com.email: s3celeste@aol.com

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