NAACP Expands Litigation for Discriminatory Lending - Black Enterprise
Black Enterprise Magazine September/October 2018 Issue

naacp-logo2The NAACP filed suit against Wells Fargo and HSBC Bank USA last week, claiming black borrowers at these institutions were more than 30% more likely to be issued a higher rate loan than white applicants with the same qualifications.

“That adds up to the biggest strip mining of working class people that this country has ever seen,” says Benjamin Jealous, president of the NAACP. “People with good credit are having their credit destroyed and are losing their homes. Even if they hold on to them, [they] are being robbed by their bank.”

The court will decide whether this case will be combined with the NAACP’s July 2007 lawsuit against Bear Stearns Residential Mortgage Corp., Chase Bank USA, Citimortgage, and GMAC Mortgage Group L.L.C., among others. The court denied the defendants’ joint motion for dismissal in January.

Upper income African Americans are more than twice as likely to receive higher cost loans from these banks as their lower income white counterparts, according to a 2007 study by the National Community Reinvestment Coalition.

When banks contribute to that disparity it “violates the Equal Credit Opportunity Act, the Fair Housing Act, and the Civil Rights Act,” says Angela Ciccolo, the NAACP interim general counsel, who is seeking injunctive relief to get banks to change their policies and practices in the future.

In response, Wells Fargo said in a statement, “The NAACP’s allegations are totally unfounded and reckless. We are proud of our lengthy record leading the industry in responsible lending practices…which makes the very thought of a discrimination claim reprehensible to us.”

Similarly, HSBC stands by its fair lending and consumer protection practices, saying that they treat “customers fairly and with integrity,” according to an HSBC spokesman.

Wells Fargo expressed dismay that the NAACP had “chosen to abandon” past discussions to develop a partnership that would benefit its constituents and communities.

“Wells Fargo was given every opportunity and every consideration and we’ve moved on from that,” Ciccolo says. “We will ask for the court to decide our claims.”

All in all, there are 14 banks being sued and many of them have received taxpayer dollars from the $787 billion government bailout of banks. While HSBC has neither applied for nor received federal bailout funds, the NAACP’s Jealous maintains they are still accountable to changing their behavior.

“Regardless of whether you are using taxpayer dollars or simply relying on the public’s trust, you have a responsibility to obey federal law and not discriminate,” Jealous says.

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Marcia Wade Talbert

Marcia is a multimedia content producer focusing on technology at Black Enterprise Magazine. In this capacity she writes and assigns stories to educate readers about social media; digital integration; gadgets, apps, and software for business and professional development; minority tech startups; and careers in STEM (Science, Technology, Engineering, and Mathematics). In 2012, she received two Salute to Excellence Awards from the National Association of Black Journalists and was recognized by Blacks in Technology (BiT) as one of the Top 10 Black achievers in the tech arena for 2011 at SXSW in Austin, Texas. She has spoken about technology on panels for New York Social Media Week, at The 2012 Rainbow/PUSH Wall Street Summit, as well as at Black Enterprise’s Entrepreneurs Conference and Women of Power Summit. In 2011, chose her as one of 28 People of Color Impacting the Social Web, and through crowdsourcing she was listed as one of BlackWeb2.0's/HP's 50 Most Notable African American Tastemakers in Social Media and Technology for 2010. Since taking on the role of Tech editor in September 2010, she has conceived and produced five cover stories on Technology and/or STEM and countless articles, videos, and slideshows online. Before joining as an interactive general assignment reporter in 2008, she freelanced with Black Enterprise beginning in 2003 while working as the technical editor at Prepared Foods magazine. There she further honed her writing skills and became an authority on food ingredients, including ingredients used in food fortification and enrichment. Meanwhile, her freelancing with Black Enterprise and helped her stay current on issues pertaining to the financial and business welfare of African Americans. As a general reporter for Black Enterprise she attended and reported on the Democratic and Republican National Conventions, where she interviewed Valerie Jarrett, senior advisor and assistant to President Barack Obama and U.S. Attorney General Eric Holder. Marcia has a Bachelor of Science degree in Agriculture with an emphasis in food science from the University of Minnesota, and a Master of Science degree in journalism from Roosevelt University in Chicago. En route to her secondary degree, she served as the editor-in-chief of the Roosevelt University Torch, a weekly, student-run newspaper. An avid photographer and videographer, Marcia is one of several employees at BLACK ENTERPRISE who interned for the publishing company as a college student. She lives in New Jersey with her husband, a food scientist; her seventeen-month-old daughter; and “The Cat”, but still considers Chicago home.