Wells Fargo settles lawsuit with ex-LO over allegedly discriminatory lending practices

A former mortgage consultant who worked for Wells Fargo and ultimately brought a case against the company in a Southern California court over allegedly being fired for complaining about discriminatory lending practices has settled with the company, according to reporting from Los Angeles-based radio outlet KNX News.

Attorneys for both parties jointly filed papers in the Los Angeles County Superior Court on Sept. 14, explaining a settlement agreement “in principle” was reached. On Nov. 3, plaintiff Stuart Williams’ lawyers requested the case be dismissed “with prejudice,” which restricts it from being refiled.

“We strongly disagree with the claims made in this lawsuit and will vigorously defend against those claims,” a Wells Fargo representative said in a statement, as reported in 2021 by MyNewsLA.

Williams, who worked for Wells Fargo in a Beverly Hills office, said he first expressed his concerns about the alleged practices in January 2020, telling his superiors “he believed that the bank had a policy of favoring some loan originators over others.”

The plaintiff also claimed the alleged practice was a violation of the Uniform Deceptive and Abusive Practices (UDAAP) Act since it adversely impacted customers who patronized consultants with less favored originations.

Williams also claimed that Wells Fargo Home Mortgage management “made it mandatory for mortgage consultants such as himself to refuse loan applications from borrowers who are members of racial minorities, the elderly, the disabled, unmarried women and others protected by the ECOA [and] the FHA,” according to the initial complaint.

The suit also claimed that borrowers were adversely impacted by the alleged policies and that loan applications were illegally refused.

The suit in total alleged “wrongful termination, rescission of contract, intentional and negligent misrepresentation, breach of the implied covenant of good faith and fair dealing and a violation of the state Labor Code,” the reporting said.

Wells Fargo in 2022 pledged $210 million to racial equity after it was criticized for lending practices that resulted in Black borrowers receiving mortgage refinances at much lower rates than other institutions.