NAACP, Wells Fargo Applaud New Financial Literacy Centers, But Not Everyone is Happy by Aja Johnson

NAACP, Wells Fargo Applaud New Financial Literacy Centers, But Not Everyone is Happy

By Aja Johnson

(TriceEdneyWire.com) - As Rev. Anthony Evans describes it, the initiative to provide financial education and banking resources to black consumers sponsored by the NAACP and Wells Fargo, the nation’s biggest mortgage lender, is a financial crime against the African American community.

 "They [Wells Fargo] ravished our community, and then they want to come back and give us a financial center being sponsored by the same people that they paid off, the NAACP," said Evans, president of the National Black Church Initiative. "None of my 15.7 million members around the country will participate at all. We will not participate, endorse, and look at this as anything legitimate but a swindle."

 Evans’ NBCI is a faith-based coalition of 34,000 churches comprised of 15 denominations. At the heart of his outrage is Wells Fargo's subprime mortgage lending to black consumers, which has resulted in many African Americans losing their homes through foreclosures. 

Prince George’s County, a bastion of the African American middle class, has the highest foreclosure rate in Maryland. Realty-Trac’s measures show that

one in every 742 housing units in the county received a foreclosure filing in February — 2.4 times the state average.

 "Wells Fargo systematically swindled Blacks all over the country with sub-prime mortgages," Evans told the District Chronicles last week.  "They ravished Baltimore.  They’re a bank we can never trust again. The reason they give this sweetheart deal is so that the NAACP can pay them off by dropping a lawsuit against them."

 In March 2009, the NAACP filed a federal lawsuit against the San Francisco-based Wells Fargo and HSBC, accusing them of "institutionalized and systematic racism" for marketing to blacks high interest subprime home loans. According to the lawsuit, African American homeowners who received the subprime mortgage loans from Wells Fargo and HSBC were 30 percent more likely to be charged higher interest loans than white borrowers who had similar credit histories.

High income African Americans did not fare any better. The suit also alleged that they were twice more likely to get higher cost loans than lower-income white clients.

Wells Fargo denied all of the allegations in the lawsuit. However, the bank closed its national network of offices that originated subprime mortgage loans in July 2010.

The NAACP dropped the suit against Wells Fargo in April 2010 after the giant bank agreed to work with the civil rights organization to find ways to improve "fair credit access, sustainable homeownership and financial literacy for communities of color."

  As part of the agreement, Wells Fargo committed to funding the NAACP Financial Freedom Center, which opened at 1816 12th St., in downtown Washington, D.C. on April 6. The Washington Post reported that the bank has promised to provide $2.5 million in each of the next five years.  The Center will be the headquarters for NAACP's campaign to promote change in the banking industry and to prevent unfair mortgage lending practices.  The civil rights organization's campaign will also seek to improve fair credit access and to influence healthy financial education, homeownership, and wealth building in historically disadvantaged communities.  

The center will host workshops on money management, credit repair and getting home mortgages in partnership with community groups throughout the DC metro area. It will also hold events to educate financial leaders about historical racial discrimination and how to address racial equality.

"We applaud Wells Fargo for agreeing to increase financial education and wealth building opportunities tailored to communities of color," said NAACP Chairman Roslyn Brock. "This partnership will increase awareness and assist minority consumers in making informed decisions regarding financial products and services.

Benjamin Todd Jealous, president and CEO of the NAACP, also applauded the bank's role in setting up the Financial Freedom Center.  

"Our aim is to change mortgage lending industry practices that have shattered families and neighborhoods and to rebuild our communities," he said.  "We commend Wells Fargo for voluntarily providing us increased access to information on its business practices that will allow the NAACP to better assess its lending practices and continue our mandate of protecting and advocating for our communities. Working together, we can address problems before they affect our community and provide the financial education needed to strengthen the movement taking place for sustainable financial strategies and real wealth building." 

Jon R. Campbell, executive vice president of Social Responsibility at Wells Fargo, welcomed the partnership between the bank and the NAACP. 

 "In the spirit of collaboration, the NAACP is already providing valuable input into programs being planned to make further improvements in our consumer outreach, education programs and our foreclosure prevention efforts," Campbell said. "We take very seriously our commitment to responsibly serve all customers across the credit spectrum and are working with partners across the nation to increase homeownership, prevent foreclosures, and stabilize African American communities. We are pleased to work side-by-side with the NAACP to provide financial education to those who are struggling to put their lives back together again."

But, Rev. Evans is not impressed. 

"I advise African Americans to get financial education largely from any respectable institution that did not participate in financial massacre in their community," he said. "Wells Fargo was a leader in pushing bad sub-prime loans on the African American community.  They destroyed tens of thousands of African American families, especially in Baltimore. Obviously, this is their pay off for NAACP dropping the lawsuit against them. Any centers that open in our community, we will picket them. We plan a strong campaign against this scam in our community."