The Trump administration’s housing authority is pursuing a potential investigation into Wells Fargo over historical commitments and programs designed to boost Black homeownership. The inquiry arrives during a federal crackdown on diversity initiatives across public and private organizations.
Federal scrutiny on Wells Fargo intensified after the Department of Housing and Urban Development sent a formal letter to bank CEO Charlie Scharf. The regulatory review focuses on whether the institution violated fair-lending laws through programs intended to expand credit access for minority communities.
Department of Housing and Urban Development Targets Minority Lending Commitments
In February 2017, the bank committed $60 billion in lending to help create at least 250,000 African American homeowners by 2027, forming the center of the inquiry alongside specialized mortgage products adopted over the past decade.
The institution later supported a special purpose credit program authorized under the Equal Credit Opportunity Act to serve disadvantaged groups, backed by a $150 million commitment aimed at lowering mortgage rates and reducing refinance costs for eligible Black homeowners.
Federal housing officials argue those past efforts crossed legal boundaries. Craig W. Trainor, the assistant secretary for Fair Housing and Equal Opportunity at HUD, criticized the initiative in his letter to bank leadership.
Scott Turner Condemns Race-Based Decision-Making
Department of Housing and Urban Development Secretary Scott Turner issued a sharp rebuke of the bank’s historical practices in a public statement regarding the investigation.
Secretary Turner plans a full investigation into the lender’s public statements and mortgage practices, according to a senior official. The agency is also reviewing similar diversity initiatives at other lending institutions.
The Trump administration banned special purpose credit programs last year, and President Trump signed an executive order asking federal contractors and subcontractors to eliminate DEI practices, a directive that has drawn legal challenges from Democratic state officials.
Legal Precedents and Past Scrutiny Faced by Wells Fargo
That case followed a 2022 Bloomberg report highlighting lending disparities between white and minority borrowers during the refinance boom. Kleber Santos, then CEO of consumer lending at Wells Fargo, addressed the bank’s strategic move in 2023 toward focusing on core customers and minority communities.
Wells Fargo declined to comment on the housing authority’s latest letter as the bank prepared to report its third-quarter financial results.
