Judge allows California city to continue fair housing suit against Wells Fargo

The bank could be ordered to pay millions of dollars in damages

By Francis Monfort

20 Jun 2018

A federal judge has rejected Wells Fargo’s bid to dismiss fair housing claims filed against it by the city of Oakland, Calif., saying potential damages can be calculated from statistical analyses provided by the city, according to a report by Bloomberg Law.

In a 2015 lawsuit, Oakland had alleged that lost substantial amounts of property tax revenues and had to spend millions of dollars to maintain foreclosed properties as result of discriminatory lending practices at the bank. Targeted at black and Hispanic borrowers, the practices resulted in a wave of foreclosures, the city claimed.

Wells Fargo had sought the dismissal of the case, but US District Judge Edward Chen of the US District Court for the Northern District of California allowed the suit to continue because the city was able to provide significant statistical analysis to show how discriminatory lending practices at the bank could have caused the increase in foreclosures among black and Hispanic borrowers.

Chen said the bank can dispute Oakland’s statistics by addressing them as a question of fact at trial instead of arguing against them at the initial pleadings stage. Wells Fargo could be ordered to pay millions of dollars in damages in case of a favorable ruling on Oakland’s property tax claims.

Wells Fargo spokesman Tom Goyda told the publication that the bank is prepared to continue defending against the claim.

“While the court’s decision allows the lawsuit to continue to the next phase, this does not suggest that any of claims ultimately will prevail, and we are prepared to defend our record as a fair and responsible lender,” Goyda said.