Back in 2018, Wells Fargo was hit with a $2.9 billion fine over, for lack of a better term, financial skullduggery it engaged in related to selling mortgage-backed securities. On the surface that penalty doesn’t look like it has much to do with race until you consider that many of the disastrous mortgages it sold were tied to home foreclosures that disproportionately impacted Black borrowers, and that the skullduggery was part of a broader economic collapse in the late aughts, from which some Black communities still have yet to recover.
Last year the company ate another $250 million fine from the feds, this time because it didn’t comply with an agreement to fix internal problems that led to the first fine (which, again, ultimately related to Wells’ lending to Black folks once you peeled back the layers). This year, the company was exposed, but at least not fined again, for approving fewer than half of the mortgage refinancing applications it got from Black applicants in 2020, compared with 72 percent for white applicants.
If you sense a pattern, then you know where this story is headed. Wells Fargo is in trouble again, and again it’s about race—specifically about how the bank treats Black folks. Only this time the issue is about job, not mortgage applicants, and the penalties could be more serious than even the fines already assessed.
The Justice Department, under a new civil rights enforcement unit, has opened a criminal investigation of Wells Fargo related to allegations that the bank has been putting minority applicants for lucrative jobs through a sham interview process, just so it could say it met an internal goal of increasing the number of nonwhite applicants it talked to. The New York Times, which first reported on the sham interviews last month, also reported the federal investigation on Friday.
The latest trouble at Wells Fargo mirrors the allegations in a class action lawsuit filed against another big institution: the NFL. Pittsburgh Steelers assistant coach Brian Flores and two other current and former Black coaches, is suing the league over allegations that under its Rooney Rule, it routinely interviewed Black coaches for jobs that had already been promised to white candidates.
Wells Fargo is accused of doing the same for a similar reason.
From the New York Times
The investigation, which is in its early stages, was spurred by a May 19 report in The New York Times that centered on a whistle-blower, Joe Bruno. Mr. Bruno, a former Wells Fargo employee, and others said bank managers were interviewing job applicants whom the bank deemed “diverse” — a catchall term for racial minorities, women and members of other disadvantaged groups — for roles that had already been promised to other people.
These sham interviews were the result of the bank’s quest to increase diversity — a noble goal that became twisted in practice because, some employees said, it was more about recording the bank’s efforts to hire more minorities than actually hiring them.
The practice was tied to Wells Fargo’s “diverse slate” policy, which stipulated that at least half the candidates interviewed for jobs paying $100,000 or more needed to be “diverse.” The rule was put in place in mid-2020. However, the practice of conducting fake interviews existed long before then, because Wells Fargo had a similar unwritten policy.
When you’re in the same company as the NFL when it comes to hiring practices vis-a-vis race, you might want to consider addressing the problem, before the Feds or disgruntled plaintiffs do. It’s a bit late on that score for Wells Fargo, though.
The Times reported that the company did not respond to requests for comment.