A $175 million joint settlement has been reached over alleged discriminatory lending practices. Illinois Attorney General Lisa Madigan and the U.S. Department of Justice have settled with lender Wells Fargo. The settlement resolves allegations that the lender and its brokers steered African American and Latino borrowers into risky subprime loans and charged minority borrowers more for their loans during the housing boom.
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"Wells Fargo's discriminatory lending practices were illegal," Madigan said. "They helped destroy a generation of wealth in African American and Latino communities...[the] settlement holds Wells Fargo accountable and requires the bank to invest in and help revitalize the same communities it helped destroy."
A lawsuit against Wells Fargo was brought by Madigan in 2009. At least 3,300 Illinois borrowers so far are estimated to be victims of discrimination by Wells Fargo brokers. On average steering victims are expected to receive restitution of $15,000 and pricing victims will receive an average of $2,000. With this settlement, Madigan is the only Attorney General to bring and resolve a fair lending lawsuit against a national bank.