The civil litigation, filed by Washington-based law firm Relman & Dane PLLC and Memphis-based Brewer and Barlow PLC, alleges that Wells Fargo targeted minority communities for predatory practices that have resulted in a disproportionate and unnecessary number of foreclosures in Memphis and Shelby County.
‘The most tragic aspect of this crisis is that it has hit minority communities the hardest,’ said Shelby County Mayor Joe Ford last week. ‘Because of redlining practices, minority communities were excluded from prime lending and became vulnerable to reverse redlining, an illegal practice which targets these neighborhoods for risky and exploitative loans.’
According to a City of Memphis press statement, the concentration of foreclosures in areas targeted for bad loans has resulted in extreme blighting, vacancies, reduced property values and lower tax revenues.
"The economic problems in Memphis cannot be attributed to a single lender," a Wells Fargo statement reads. "We believe this lawsuit promotes a weak argument that courts around the country have already rejected. Wells Fargo's controls and processes have been in place for years and are subjected to constant internal and regulatory review. These controls are designed to assure that every person qualified for a prime loan will get one, without regard to their race.
"We also believe communities are ultimately better served when elected officials and lenders work collaboratively to address the current economic issues facing our neighbors," the company statement continues, adding, "Weâ�¦are proud of our lengthy record leading the industry in fair and responsible lending and supporting the communities we serve."