The U.S. Department of Housing and Urban Development is investigating whether Wells Fargo violated fair-lending laws through programs designed to increase Black homeownership.
HUD Secretary Scott Turner announced the investigation Wednesday (October 7), saying the agency is examining Wells Fargo’s “race-based decision-making” and whether its mortgage programs violated the Fair Housing Act.
The investigation focuses in part on Wells Fargo’s efforts to address the racial homeownership gap. According to The Wall Street Journal, the bank pledged in 2017 to provide $60 billion in mortgage lending to help at least 250,000 Black households become homeowners by 2027.
Wells Fargo expanded those efforts in 2022 with a $210 million initiative, including a $150 million Special Purpose Credit Program for eligible Black homeowners seeking to refinance. The Wall Street Journal reported that the bank had reached about 40% of its original $60 billion commitment.
The investigation follows scrutiny of Wells Fargo’s lending practices. Bloomberg reported that the bank rejected more than half of Black applicants seeking to refinance their mortgages in 2020.
HUD alleges Wells Fargo may have used a practice of “sorting” homeowners based on race. The agency said the investigation will determine whether those practices violated the Fair Housing Act.
“Even if Wells Fargo did not violate the law, its practice of dividing Americans based on race is immoral, unethical and un-American,” Turner said.
The Wall Street Journal reported that Wells Fargo’s refinance program had helped about 5,100 customers, with borrowers saving an average of about $100 per month.
The investigation comes as a significant racial homeownership gap remains. According to the Pew Research Center, 46% of Black households owned homes in 2024, compared with 73% of White households.
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