Wells Fargo & Co. (NYSE: WFC) Accused of Predatory Lending in Pennsylvania

Wells Fargo & Co. (NYSE: WFC) has been accused by the Pennsylvania Human Relations Commission of engaging in predatory lending practices, especially in heavily African American neighborhoods in Philadelphia.

The panel said in a complaint that Wells Fargo has engaged in lending practices contributing to the “disproportionately large number of foreclosures” in these neighborhoods since 2004. The complaint said that Wells Fargo & Co’s “predatory practices” have included excessive fee charges and high interest rates “not justified by the borrowers’ creditworthiness.”

The group also accused Wells Fargo & Co. (NYSE: WFC) of engaging in other predatory practices such as large prepayment penalties and convincing borrowers to refinance into new loans that only benefited Wells Fargo.

Citing data from the Home Mortgage Disclosure Act showing that between 2004 and 2008, the firm showed that two to three times as many African Americans as whites were approved for loans at least 3% above federal benchmarks.

“We do not tolerate discrimination against, or unfair treatment of, any consumer,” said Wells Fargo spokeswoman Teri A. Schrettenbrunner. “We are committed to serving all customers responsibly and fairly, and we will vigorously defend the commission’s unfounded claims.”

Wells Fargo & Company is a diversified financial services company. The Company provides retail, commercial and corporate banking services through banking stores located in 39 states and the District of Columbia. It provides other financial services, through subsidiaries engaged in various businesses, principally wholesale banking, mortgage banking, consumer finance, equipment leasing, agricultural finance, commercial finance, securities brokerage and investment banking, insurance agency and brokerage services, computer and data processing services, trust services, investment advisory services, mortgage-backed securities servicing and venture capital investment. The Company operates in three segments: Community Banking, Wholesale Banking, and Wealth, Brokerage and Retirement. As of December 31, 2009, the Company provided banking, insurance, investments, mortgage and consumer finance from more than 10,000 stores under various types of ownership and leasehold agreements.

Shares of Wells Fargo & Co. (NYSE: WFC) traded down 1.03% hitting $27.78 during mid-day trading on Thursday.