Thursday, April 08, 2010 4:42 pm
NAACP drops mortgage lawsuit against Wells Fargo
By IEVA M. AUGSTUMSAP Business Writer
The lawsuit, filed over a year ago, is among more than a dozen the National Association for the Advancement of Colored People has filed since 2007 against large financial institutions.
As part of an agreement, San Francisco-based Wells Fargo will allow the NAACP to review its lending practices. The NAACP did not seek monetary damages in its suit, but said it sought to change behavior in the mortgage-lending industry.
NAACP President Benjamin Todd Jealous said Wells Fargo pledged to follow the group's principles on fairness and lending, which "ensure all borrowers get the highest quality credit vehicle appropriate for their circumstances and that guard against racial discrimination in lending."
Subprime mortgages, or loans given to customers with spotty credit history, helped fuel a collapse in the housing market in late 2007.
The crumbling housing market, along with high unemployment, led to a sharp increase in loan defaults across all types of consumer loans. A recovery in the sector has been slow and uneven as customers continue to struggle to pay their loans.
Wells Fargo said it is proud of its fair and responsible lending practices, which it made public in 2004. However, Wells Fargo spokesman Oscar Suris added, "We always believe there's room to improve."
"We believe it's important for a company like ours to work with and incorporate the viewpoints of important stakeholders like NAACP," Suris said.
The NAACP remains in litigation with 14 other financial institutions, including JPMorgan Chase & Co., Citibank Inc. and HSBC Holdings PLC over allegations of unfair lending practices and lending discrimination.
Shares of Wells Fargo rose 24 cents to close at $32.23.