Wells Fargo Caught in Probe Over Mortgage Pricing Discrimination

The bank, among others, is under scrutiny for potential violations of U.S. fair lending laws, with Black and female borrowers receiving fewer loan discounts.

• Wells Fargo was caught in an industrywide probe into the use of loan discounts, known as pricing exceptions, which are used by mortgage personnel to secure deals in competitive markets.
• Regulators have shown interest in this practice due to potential violations of U.S. fair lending laws, as Black and female borrowers received fewer pricing exceptions than other customers.
• Wells Fargo received an official notice from the Consumer Financial Protection Bureau (CFPB) regarding issues with its discounts, but it is unclear if the bank was accused of discrimination or sloppy oversight.
• The bank has faced regulatory scrutiny in the past, having paid more than $184 million in 2012 to settle federal claims that it charged minorities higher fees and unjustly put them into subprime loans, and was fined $250 million in 2021 for failing to address problems in its mortgage business.
• The CFPB launched 32 fair lending probes last year, more than doubling the investigations it started since 2020, and several banks received notices about lending practices.

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