By Candice Ludlow
http://stream.publicbroadcasting.net/production/mp3/wkno/local-wkno-961077.mp3
Memphis, TN – Today, was the first time Wells Fargo and Memphis and Shelby County squared off in front of a judge over a lawsuit the city has brought against the bank. Memphis says Wells Fargo created blight with bad loans in black neighborhoods. Candice Ludlow reports.
Wells Fargo's lead attorney Andrew Sandler told US District Judge Thomas Anderson that he should toss the case because Memphis cannot prove that Wells Fargo's lending practices have caused inner-city deterioration. Sandler told the judge there are 40,000 vacant properties in Shelby County, and the city linked only 50 to Wells Fargo.
Wells Fargo spokesperson Vickee Adams said the bank does not practice any discriminatory or irresponsible lending practices.
"We work with customers consistently to help them avoid foreclosure at all times." Adams continues, "We believe in sustainable homeownership, and that means that using responsible lending principles to assure that people who are borrowing money are in a position to afford it and to pay it back."
Lead attorney for Memphis and Shelby County John Relman told the judge that contrary to what Wells Fargo says, the bank has practiced "reverse redlining." He says the bank targeted African-American customers with pricey loans it knew they couldn't pay back. Relman says Wells Fargo loans in black neighborhoods defaulted at a rate seven times that of Wells Fargo loans in white neighborhoods.
"We focused on Wells because we felt they're an outlier," Relman explains. "And we think the fact that we see differences in these foreclosure disparities among banks is a clear indicator in fact that some people knew how to do it right and knew how to engage in the underwriting."
The city's case includes depositions from six former Wells Fargo employees. Judge Anderson is now considering both arguments.