Today, the Department of Justice and Wells Fargo announced a $175 million settlement in a case of systematic discrimination against Hispanic and African-American homeowners and borrowers. Rep. Luis V. Gutierrez (D-IL), the Ranking Democrat on the Housing, Insurance, and Community Opportunity Subcommittee in the U.S. House of Representatives issued the following statement:
I am sorry there will be no "perp walk" for the top executives so we can see their faces. I know that if someone in my neighborhood robs a bank, they go to jail. But if a bank robs my neighborhood, nobody goes to jail.
I am obviously pleased that systemic discrimination against black and Hispanic borrowers is being addressed. Charging people of color higher fees and steering them towards riskier categories of loans is outrageous and the creation of the Consumer Financial Protection Bureau (CFPB) is a concrete step we took to protect consumers from predatory practices. I will continue to defend the CFPB against Republican efforts to destroy or neuter it precisely because it was designed to bring discriminatory practices like these to light. We need to continue to make homeownership available in minority communities and ensure that fair lending practices are followed because home ownership is what builds stable, vibrant, and successful neighborhoods.
The portion of the $50 million in down payment assistance and $125 million in compensation for those whose rights were violated that will come to Chicago will help my District and the whole City of Chicago. More importantly, this demonstrates that in the end, the systematic practice of discriminating against minorities is a very, very expensive and ultimately unprofitable way of doing business, and every other bank executive now knows that.