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The Trump administration has launched an investigation into a Wells Fargo program aimed at increasing homeownership among Black Americans. The U.S. Department of Housing and Urban Development (HUD) is examining whether the bank's race-based lending practices violate the Fair Housing Act. HUD Secretary Scott Turner criticized the program as "immoral, unethical and un-American," despite Wells Fargo's $150 million commitment to lower mortgage rates and refinancing fees for qualifying Black homeowners.
The investigation, announced on Wednesday (October 7), comes as part of a broader crackdown on corporate diversity programs by the Trump administration. The administration argues that such programs, which proliferated during the Biden administration, discriminate against other homebuyers. According to USA Today, HUD Assistant Secretary Craig Trainor stated that "attempting to close statistical racial gaps in homeownership by doling out loans based on race is no way to do business."
The Wells Fargo program was established under federal rules that allow lenders to address historic barriers to lending. Fair housing advocates, including Nikitra Bailey of the National Fair Housing Alliance, argue that the program is legal and necessary to remedy past discrimination. Bailey stated, "Investigating a bank for following the government's own rules to create paths to address longstanding discrimination in lending is an abuse of the agency’s investigative authority."
Wells Fargo has not commented on the investigation. The bank has faced previous allegations of discrimination, including a Bloomberg report that found it rejected half of all refinancing applications from Black families in 2020. The investigation could expand to similar programs at other financial institutions, as the administration continues to scrutinize diversity, equity, and inclusion initiatives.
The Banking Dive reports that Wells Fargo's initial $60 billion commitment to increase African American homeownership began in 2017. The program aimed to create at least 250,000 African American homeowners by 2027. However, the Trump administration's investigation could pose significant regulatory and legal risks for the bank and other institutions engaged in similar practices.