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The U.S. Department of Housing and Urban Development has opened an investigation into Wells Fargo’s efforts to expand homeownership among Black Americans, examining whether the bank’s programs violated fair-lending laws, The Wall Street Journal reported Wednesday, October 7. The inquiry centers on whether the bank offered products or terms differently based on borrowers’ race, according to the Journal’s account of a letter sent to Wells Fargo Chief Executive Charlie Scharf.
Reuters, which reported on the Journal story, said it could not independently verify the report. Wells Fargo declined to comment to Reuters, while HUD did not immediately respond to its request. The reported investigation puts a long-running bank initiative under regulatory scrutiny as federal officials also review similar programs at other lenders, according to the Journal.
A decade-long homeownership initiative
Wells Fargo announced its initiative in 2017, committing $60 billion in lending with a stated goal of helping create at least 250,000 African American homeowners by 2027. The bank described the commitment as a way to expand responsible homeownership and address barriers facing Black households.
The program is the central subject of the reported HUD inquiry. According to Reuters’ account of the Journal report, the department’s letter characterized the bank’s approach as “sorting” homeowners and providing different products or terms based on race. That is an allegation described in reporting, not a finding that Wells Fargo broke the law.
Investing.com, in a separate report on the probe, said Wells Fargo had reached about 40% of its original $60 billion lending commitment and had helped refinance roughly 5,100 customers by the time of a racial-equity assessment the bank commissioned in late 2023. The report said Wells Fargo later removed that assessment from its website. The available reporting does not detail what specific lending decisions HUD will review or provide a timetable for the investigation.
Refinancing disparities preceded the inquiry
The bank’s homeownership efforts drew scrutiny after a 2022 Bloomberg investigation reported that Wells Fargo approved 47% of Black applicants seeking to refinance in 2020, compared with 72% of white applicants. The figures were cited in a March 2022 letter from senators to HUD and the Consumer Financial Protection Bureau calling for a review of the bank’s refinancing practices.
The senators’ letter said the reported approval rates raised questions about compliance with the Fair Housing Act and the Equal Credit Opportunity Act, while acknowledging that differences in applicants’ circumstances and loan characteristics can affect decisions. The letter requested a review; it did not establish that the bank had violated either law.
In 2022, Wells Fargo announced an expansion of its work to refinance minority homeowners using its own funds, according to Investing.com’s account. The context underscores that the current reported probe concerns not only the bank’s stated goal of widening access, but also how it designed and administered programs intended to pursue that goal.
Investigation’s scope and next steps remain unclear
HUD Secretary Scott Turner plans a full investigation into the bank’s statements, Reuters reported, citing the Journal. The Journal also reported that the department is reviewing similar initiatives at other banks, suggesting the inquiry may extend beyond Wells Fargo. No public filing or formal findings were identified in the reporting available Wednesday.
The investigation arrives amid a broader Trump administration effort to challenge diversity, equity and inclusion initiatives. Reuters reported that President Donald Trump signed an executive order earlier this year directing federal contractors and subcontractors to eliminate DEI practices; Democratic state officials have sued over that order. The reported HUD inquiry is separate from that litigation, and the available reports do not specify how the order relates to the legal questions being examined in Wells Fargo’s case.
For now, the reported letter signals a review rather than a concluded enforcement action. HUD has not publicly set out the evidence it is seeking, the precise legal theories under examination, or when it expects to finish. Wells Fargo’s response to the probe beyond its reported refusal to comment to Reuters was not available in the contemporaneous coverage.
