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NAACP Accuses Banks Of Racism

Black Voice News.com, News Report, Posted: Mar 19, 2009

The NAACP launched its 100 year anniversary by filing lawsuits Friday against two banks, alleging they discriminated against African-Americans by using racist practices in mortgage lending.

The class actions against Wells Fargo, based in San Francisco, and Illinois based HSBC claim that Black home owners were more than 30 percent likely to be issued a higher interest rate than white borrowers with the same qualifications. They say the banks used institutionalized, systemic racism against African-Americans.

These banks have a pattern of charging Black people more, even though they have good credit, good assets and good incomes, NAACP President and CEO Benjamin Jealous said. The higher interest can make a difference between being able to hold onto a home or lose it.

In a written statement, Wells Fargo spokesman Chris Hammond said the allegations are totally unfounded and reckless and that the bank never tolerated and will never tolerate discrimination. Generations of African-Americans have been deprived of the opportunity to participate in the American dream by banks that refused to give them mortgage loans simply because of the color of their skin or placed them in unfavorable loans that decimate them financially, states the suit. It is beyond dispute that the African-American community has long been the victim of discriminatory banking practices.

Jealous said subprime mortgages, intended for people with poor credit, were given to African-Americans who qualified for better loans 54 percent of the time compared to 23 percent for white people.

Kate Durham, a spokeswoman for HSBC, said the bank would not comment on litigation.

We stand by our fair lending and consumer protection practices and we are confident that we are treating our customers fairly and with integrity, Durham said in a written statement.

The NAACP filed the lawsuits after receiving a barrage of complaints from members nationwide and pouring over voluminous loan documents and data. Jealous said the organization wants the practice stopped and is not seeking monetary damages.

Both suits were filed in U.S. District Court in California. A third bank that was to be named Friday entered into a preliminary settlement agreement with the civil rights organization.

In 2007, the NAACP filed similar discrimination suits against more than a dozen banks, including Chase Bank USA, Ameriquest Mortgage Co. and Citimortgage.

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On 100th Anniversary, NAACP Challenges First Black President



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