(03-13) 15:56 PDT SAN FRANCISCO - -- The NAACP filed lawsuits Friday against two banks, alleging they discriminated against African Americans by using racist practices in mortgage lending.The class actions against Wells Fargo, based in San Francisco, and Illinois-based HSBC claim that black home owners were more than 30 percent likely to be issued a higher interest rate than white borrowers with the same qualifications. They say the banks used institutionalized, systematic racism against African Americans."These banks have a pattern of charging black people more, even though they have good credit, good assets and good incomes," NAACP President and CEO Benjamin Jealous said. "The higher interest can make the difference between being able to hold onto a home or lose it."In a written statement, Wells Fargo spokesman Chris Hammond said the allegations are "totally unfounded and reckless" and that the bank never tolerated and will never tolerate discrimination."We are proud of our lengthy record leading the industry in responsible lending practices and in support of the communities we serve, which makes the very thought of a discrimination claim reprehensible to us," wrote Hammond. "We intend to vigorously defend these unfounded allegations."The lawsuit cites several studies that document discrimination, including a 2006 report by the Center for Responsible Lending that found black people were 31 to 34 percent more likely to receive higher-rate subprime loans. The suit claims the banks violated the Fair Housing Act, the Equal Credit Opportunity Act and the Civil Rights Act."Generations of African Americans have been deprived of the opportunity to participate in the American dream by banks that refused to give them mortgage loans simply because of the color of their skin or placed them in unfavorable loans that decimate them financially," states the suit. "It is beyond dispute that the African American community has long been the victim of discriminatory banking practices."Jealous said subprime mortgages, intended for people with poor credit, were given to African Americans who qualified for better loans 54 percent of the time compared to 23 percent for white people.
The class is defined in the suit as African Americans who received subprime mortgage loans even though they qualified for conventional loans and people whose loans were approved based on low initial interest but who would not have qualified after the rate increased. SOURCE:SFGATE.COM
