Wells Fargo Wants Philly’s Discriminatory Lending Lawsuit Dismissed

The city has accused the bank of steering black and Latino homebuyers to high-risk loans.

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In May, Philadelphia filed a lawsuit alleging that Wells Fargo engaged in discriminatory lending practices against black and Latino home loan borrowers. Two months later, the bank is pushing back. It wants Philadelphia’s complaint thrown out.

In a July 21 motion to dismiss the city’s discriminatory lending lawsuit, Wells Fargo says the court should drop Philadelphia’s suit for several reasons.

One reason listed says that Philadelphia’s claims are “too remote” to prove that Wells Fargo directly led to a loss of property tax revenue for the city, a standard set by a recent Supreme Court ruling from a Miami suit against the bank. 

The motion also calls for dismissal on the grounds that Philadelphia has simply copied the complaints against Wells Fargo submitted by cities like Los Angeles and Miami. The theories advanced by those cities don’t apply to Philadelphia, the motion states.

Wells Fargo further argues that Philadelphia’s complaint has already been adjudicated in Pennsylvania. In 2012, the bank agreed to pay $175 million to the Department of Justice to resolve allegations that it discriminated against black and Latino homebuyers. Because the settlement resolved a complaint filed by the Pennsylvania Human Rights Commission, Wells Fargo says Philadelphia has no right to pursue a claim that’s already been addressed.

And Philadelphia is just too late, the motion says. The city has failed to meet the two-year statute of limitations for Fair Housing Act claims.

On July 21, Wells Fargo also submitted a separate motion to strike some of the city’s allegations that it deems “immaterial and impertinent.” The allegations are “designed to be inflammatory and foster prejudice and confusion about Wells Fargo’s lending conduct,” attorneys for Wells Fargo wrote.

Philadelphia’s lawsuit alleges that Wells Fargo has violated the Fair Housing Act when it steered black and Latino borrows towards high-risk and high-cost loans even when those borrowers were eligible for safer options. The complaint even alleges that Wells Fargo incentivized employees who pushed homebuyers to less favorable loans like the lender credit loan.

On Tuesday, a City of Philadelphia representative said the city had no comment on the bank’s recent motion.

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