Wells Fargo to Pay $175 Million in Race Discrimination Probe

(Reuters) – Wells Fargo & Co has agreed to pay $125 million to resolve allegations it discriminated against certain borrowers on the basis of race and national origin in its mortgage lending, the U.S. government said on Thursday.

Wells Fargo also agreed to contribute $50 million to help those buyers making down payments or improving their homes in some metropolitan areas around the country, including Baltimore, Chicago, Cleveland, Los Angeles, New York, Philadelphia and Washington. The government identified those areas needing the most help in recovering from the housing crisis.

The settlement, which needs approval from a judge, would end the investigation into whether the fourth-largest U.S. bank between 2004 and 2009 knowingly targeted minorities for risky mortgages that came with higher costs, according to documents filed in the U.S. District Court for the District of Columbia.

“An applicant’s creditworthiness, and not the color of his or her skin, should determine what borrowers pay and what loans they qualify for,” Deputy Attorney General James Cole said in a press conference. “Put simply, there is no place for discriminatory lending in the marketplace, and it will not be tolerated.”

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