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The U.S. Department of Housing and Urban Development is examining Wells Fargo programs and commitments intended to expand Black homeownership, the Wall Street Journal reported Wednesday, October 7. The reported inquiry will consider whether the bank violated fair-lending laws by favoring Black or other minority borrowers, according to a letter the Journal said HUD sent to Wells Fargo Chief Executive Charlie Scharf.
Reuters said it could not independently verify the Journal’s account. Wells Fargo declined to comment, and HUD did not immediately respond to Reuters’ request for comment. The reported examination is at an early stage; no finding of unlawful conduct or enforcement action has been announced.
Reported inquiry centers on past commitments
The Journal-reported letter concerns measures Wells Fargo adopted nearly a decade ago to increase homeownership among Black Americans. A 2017 commitment included lending $60 billion to help add at least 250,000 Black homeowners by 2027, Reuters reported.
The letter reportedly characterizes the bank’s approach as sorting homeowners and providing different products or terms based on race. That characterization is an allegation attributed to the letter, not an established finding. Reuters reported that HUD Secretary Scott Turner intends to conduct a full investigation into Wells Fargo’s statements, citing a senior official, and that the department is reviewing similar initiatives at other banks.
Fair Housing Act governs mortgage treatment
The Fair Housing Act prohibits discrimination based on race and other protected characteristics in housing transactions, including mortgage lending. HUD’s published guidance says the law applies at different stages of the mortgage process, including loan approval and decisions about interest rates, fees and other terms. It also identifies steering borrowers toward less favorable loan terms because of race as a form of prohibited discrimination.
The central question raised by the reported inquiry is whether Wells Fargo’s programs merely sought to broaden access, or whether their design or operation resulted in different treatment of applicants because of race. The public reporting does not provide the full letter, the specific programs under examination or HUD’s legal reasoning. Those details, along with the bank’s response to the allegations, remain unknown.
Bank’s disclosed progress and home-lending changes
In a corporate racial-equity assessment, Wells Fargo reported that by the end of 2022 it had provided $24 billion in mortgage loans to more than 88,000 Black borrowers, about 40% of its stated commitment. The same assessment said the bank’s home-lending business had changed and that, in January 2023, it announced a new strategic direction that narrowed the business’s focus, including on underserved and minority communities.
Those figures describe lending totals and the bank’s stated strategy; they do not establish whether borrowers received equal treatment or whether HUD considers the programs compliant. The 2027 deadline for the 2017 goal has not yet arrived, and Reuters’ account does not say whether the reported inquiry assesses progress toward the target, the structure of the initiatives, or both.
Disparity provides context, not a finding
The investigation is unfolding against a persistent gap in U.S. homeownership rates. Census Bureau data put the Black homeownership rate at 45.3% in the second quarter of 2024, compared with 74.4% for non-Hispanic White householders. The figures help explain why banks and other institutions have announced efforts to widen access, but they do not resolve the legal question in Wells Fargo’s case.
The reported inquiry also comes amid broader scrutiny of diversity, equity and inclusion policies under the Trump administration, Reuters noted. At this point, the specific next steps and timing for the Wells Fargo examination have not been publicly detailed. HUD has not publicly confirmed the inquiry in the reporting available, and Wells Fargo has not provided a response beyond declining to comment to Reuters.
