Wells Fargo faces a federal investigation over claims its efforts to boost Black homeownership involved discriminatory lending practices. The U.S. Department of Housing and Urban Development (HUD) initiated the probe after alleging the bank broke the Fair Housing Act by applying race-based criteria in its lending programs.
The review examines two major programs: a $60 billion pledge made in 2017 to help 250,000 Black families become homeowners by 2027, and a $150 million refinance initiative launched in 2022. In a letter to Wells Fargo CEO Charlie Scharf, Assistant Secretary Craig Trainor condemned these efforts as “immoral, unethical, and un-American,” arguing they violated federal law by using race as a factor in loan decisions.
HUD’s position relies on a Bloomberg report showing Wells Fargo approved refinance loans for Black borrowers at a rate 15 percentage points below industry standards. The bank called the 2022 program “a next step” in helping close a racial gap in homeownership.
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The 2022 initiative came after the Biden administration encouraged banks to serve “economically disadvantaged” communities, but that policy was reversed in August 2024. Wells Fargo and other financial institutions have since reduced their involvement in diversity, equity, and inclusion (DEI) programs amid growing federal oversight. However, HUD’s investigation centers on actual lending behavior rather than public statements.
Wells Fargo has not issued a public comment on the probe. HUD Secretary Scott Turner stated that even without legal violations, the bank’s approach of categorizing borrowers by race runs counter to the principles of the Fair Housing Act, which was designed to eliminate housing discrimination.