Wells Fargo settles inquiry into bias against moms
NEW YORK (AP) — The federal government said Thursday that it reached a $5 million settlement with Wells Fargo to resolve allegations it discriminated against pregnant women, new mothers and women on maternity leave.
The U.S. Department of Housing and Urban Development said Wells Fargo's home mortgage unit refused to make loans available to some women based on their gender or family status, and forced some women to give up their maternity leave and go back to work before it would close a loan with them. HUD said bank employees also made discriminatory statements to and about women who were pregnant or had recently given birth.
The agency said Wells Fargo will change its underwriting guidelines as part of the settlement and will show its staff how to follow the new guidelines.
Wells Fargo & Co. said it is settling to avoid a long legal battle. It said HUD found no violations of any laws.
The San Francisco company will distribute a total of $165,000 to six families. It will also set aside at least $3.5 million to compensate other applicants who were discriminated against. The agency said it received complaints from across the country, including from Arizona, California, Nebraska, Nevada and Texas.
HUD said the $3.5 million fund is intended to pay $20,000 each to as many as 175 claimants, and if there are more, the company will set aside another $1.5 million to make similar payments to as many as 75 more claimants. Claimants beyond those 250 would share a prorated portion of the $5 million.
Wells Fargo Home Mortgage is the largest U.S. provider of home mortgage loans.