Wells Fargo and HSBC are being accused of discriminatory lending, as the National Association for the Advancement of Colored People (NAACP) claims the two companies led black borrowers to take out subprime loans despite their having the same qualifications as white borrowers who received lower rates.
The Associated Press reports that class-action lawsuits were expected to be filed today in federal court in Los Angeles. The NAACP's co-lead counsel, Austin Tighe, has told the AP that black home buyers have been more than three times more likely to receive subprime loans than white borrowers with comparable credit scores and income levels. That figure nearly doubles when it comes to refinancing opportunities, Tighe says.
‘This is systematic, institutionalized racism,’ Tighe says, according to the AP report. ‘Once you take out factors relative to income and credit risk, the only difference between the borrowers is the color of their skin.’
SOURCE: Associated Press