Lisa Madigan (D)
SPRINGFIELD, Ill. (Legal Newsline) - Illinois Attorney General Lisa Madigan has filed suit against Wells Fargo and Co., accusing the bank of illegally forcing minorities into high-cost subprime loans.
Wells Fargo specifically targeted heavily populated black and Latino areas for high cost loans, while whites with similar income levels received lower cost loans, according to the lawsuit filed in Cook County Circuit Court.
The Democratic attorney general's suit also alleges the company put into place a highly flexible lending policy procedure with little oversight, which permitted Wells Fargo's employees to steer African-Americans and Latinos into subprime loans.
Employees were rewarded with a lucrative compensation if they could get borrowers to sign onto a high-cost mortgage, according to Madigan.
"As a result of its discriminatory and illegal mortgage lending practices, Wells Fargo transformed our cities' predominantly African-American and Latino neighborhoods into ground zero for subprime lending," Madigan said.
The lawsuit requests that the court to repeal all unfair contracts and grant full restitution to affected consumers, as well as impose civil penalties for violations.
Last month, a U.S. District Court judge ruled that the city of Baltimore had enough evidence to move forward with its own lawsuit against Wells Fargo over allegations the company targeted all black neighborhoods within the city.
That suit claims Baltimore has had a high number of foreclosures costing the city tens of millions in taxes and services, as a result of actions taken by Wells Fargo.