In 2007, I applauded when the NAACP filed a class action lawsuit against 15 of the nation’s largest subprime lenders for “systematic, institutionalized racism in sub-prime home mortgage lending.”
The defendants included Wells Fargo Bank & Company.
Though Well Fargo’s role in the subprime mortgage scheme was well-known, the predatory lender was the “title sponsor” of Tavis Smiley’s annual talkfest.
Smiley claimed ignorance. He finally severed his ties with Wells Fargo when the glare of media spotlight got too hot.
NAACP President and CEO Benjamin Jealous was an outspoken critic of Wells Fargo. So you can imagine my surprise when earlier this month, I read the NAACP dropped its lawsuit against the predatory lender:
The NAACP announced today that it is ending its lawsuit against Wells Fargo Bank, N.A. Since 2007, the NAACP has filed lawsuits against more than a dozen of the largest financial institutions alleging violations of the Fair Housing and Equal Credit Opportunity Acts and racial discrimination.
Unlike other pending lawsuits that seek monetary damages on behalf of individual borrowers, the NAACP lawsuits seek to change mortgage lending industry behaviors.
So what did the NAACP get? Wells Fargo endorsed the NAACP’s “Banking Principles on Fairness and Lending.”
Jealous said:
We brought these lawsuits against lenders to change and stop patterns of racial discrimination and other mortgage lending behaviors that have shattered American lives, families, and neighborhoods. We developed the NAACP banking principles to ensure that our country moves toward higher rates of sustainable homeownership. We commend Wells Fargo for taking a leadership role by being the first to embrace our principles, and hope this effort becomes a model for collaborating with other financial institutions.Query: how will the NAACP enforce the agreement?
Jon Campbell, Wells Fargo’s executive vice president for social responsibility, told the New York Times it will be a while before there’s any change in their lending practices:
But now we have a partner, and we can look at ourselves through their lens. Will there be tweaks? We hope so.
So that’s what the NAACP got? Hope.
The NAACP is headquartered in Baltimore. On the same day the civil rights organization dropped its lawsuit, the City of Baltimore filed an amended federal complaint accusing Wells Fargo of steering blacks into subprime mortgages.
City Solicitor George Nilson said:
Our purpose in bringing this lawsuit remains the same as it always has been. We intend to expose Wells Fargo’s illegal, discriminatory practices to the light of day in a court of law. We want to make sure Wells Fargo reforms its lending practices, and takes specific, constructive steps to assist the City in repairing the damage caused by the many unnecessary foreclosures its irresponsible practices caused.
Fast forward to yesterday. I visited the NAACP’s website to confirm the dates of its annual convention. I nearly spilled my coffee when I saw this banner.
While no money changed hands on April 7, Wells Fargo is now a “lead sponsor” of the NAACP’s 101st annual convention.
Less than two weeks ago, Jealous participated in the “Measuring the Movement” national leadership forum. The air was filled with talk of holding “everyone accountable from government to our own institutions.”
Will the NAACP be held accountable for its relationship with a predatory lender?
Or was all the talk more hot air?
