The Trump administration has accused Wells Fargo of discriminatory lending in violation of the Fair Housing Act, according to a letter sent to Wells CEO Charlie Scharf Wednesday.
The U.S. Department of Housing and Urban Development is initiating an investigation into the bank’s mortgage lending policies and practices, including its $60 billion lending commitment in 2017 “to create at least 250,000 African American homeowners by 2027” and its $150 million special purpose credit program in 2022 to allow eligible Black homeowners to refinance their mortgages to lower rates.
“Despite the Fair Housing Act’s unambiguous, categorical prohibition on race-based home loans, the previous administration used special purpose credit programs as a vehicle to import racial discrimination into the housing market,” wrote Craig Trainor, assistant secretary for fair housing and equal opportunity, in the letter to Scharf.
“Though banks sometimes reluctantly acceded to pernicious race-conscious lending practices, Wells Fargo emerged as the ‘first mortgage lender to make a public commitment’ to implement a racialized home loan policy,” Trainor wrote.
A spokesperson for Wells Fargo declined to comment.
Wells’ initial $60 billion commitment happened in the early days of the first Trump administration. But its 2022 program followed Biden-era interagency guidance encouraging financial institutions to use the credit programs to better meet the needs of “economically disadvantaged” communities. The guidance was rescinded in August.
The 2022 program also followed a Bloomberg report that Wells trailed, by 15 percentage points, the industrywide average acceptance rate for Black borrowers looking to refinance their mortgages. The bank that year called the program “a next step” in helping close a racial gap in home ownership.
“But attempting to close statistical racial gaps in homeownership by doling out loans based on race is no way to do business,” Trainor wrote Wednesday. “And doing so in residential real estate related transactions is illegal under the Fair Housing Act.
“The Trump Administration will not tolerate the kind of destructive discriminatory lending practices that compelled Congress to enact the Fair Housing Act in the first place,” he wrote.
Wells and other banks backed away from references to diversity, equity and inclusion in 2025 amid a federal crackdown on DEI initiatives in the private sector. But according to Trainor, “the bank’s obligations under the Fair Housing Act rise or fall based on actual practices, not buzzwords or website aesthetics.”
In a prepared statement on the probe, HUD Secretary Scott Turner said that “[e]ven if Wells Fargo did not violate the law, its practice of dividing Americans based on race is immoral, unethical and un-American.”
