Wells Fargo & Co. and HSBC Holdings PLC defended their lending practices on Friday after the NAACP said it was filing lawsuits accusing the two companies of "systematic, institutionalized racism" in their lending to certain borrowers.
The National Association for the Advancement of Colored People said it would file the suits Friday morning in the U.S. District Court for the Central District of California. The group claims that African-American homeowners were frequently steered into mortgages with higher interest rates than those offered to white borrowers with similar credit histories.
An HSBC spokeswoman said, "We stand by our fair-lending and consumer protection practices and we are confident that we are treating our customers fairly and with integrity."
Wells Fargo called the allegations "unfounded and reckless" and said it has "never tolerated … discrimination in any way, shape or form in any of our business practices." The company said its loan terms and pricing are based on market factors, as well as "individual customer and loan circumstances." It also said it had been working with the NAACP for the past two years to develop a partnership.
The suits are tied to one the NAACP filed in 2007 alleging discriminatory lending practices by other large lenders.
