HUD Opens Fair Housing Act Investigation Into Wells Fargo's Black Homeownership Programs

The Department of Housing and Urban Development opened an investigation on October 7 into whether WFC's programs to boost Black homeownership violated the Fair Housing Act by offering different products or terms based on race. HUD Secretary Scott Turner said the department is also reviewing similar initiatives at other banks. The letter to CEO Charlie Scharf came from Craig Trainor, HUD's assistant secretary for fair housing and equal opportunity, and directs the bank to preserve its lending records.

The programs at issue date back years. In 2017 Wells Fargo pledged $60 billion in loans to help add at least 250,000 Black homeowners by 2027, and in 2022 it announced $210 million for racial equity in homeownership, including $150 million to help minority borrowers refinance. HUD's position is that labeling an effort a special purpose credit program does not exempt it from the Fair Housing Act. Wells Fargo declined to comment.

Shares fell as much as 2.2% to a session low on October 7 before trading about 1.6% lower. The action fits the administration's broader push against diversity programs, and Turner's statement that HUD is examining other lenders makes this an industry question rather than a single-bank one.

Watch whether HUD files a formal charge or seeks a settlement, which other banks receive similar letters, and whether lenders pull back from targeted lending programs. A new fair-lending matter is a reputational setback even if the financial exposure proves small.