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FOX West Texas: ‘Diabolical and wrong’: Wells Fargo, other banks finance predatory lenders that can charge over 400% interest in minority communities

FOX West Texas, May 23,  2021, ‘Diabolical and wrong’: Wells Fargo, other banks finance predatory lenders that can charge over 400% interest in minority communities

Payday lenders and other businesses that offer high-cost, small-dollar loans say they serve customers that big, traditional banks ignore.

But a WFAA investigation discovered the money that finances many predatory lenders comes from the very same big banks.

Data that Wells Fargo shares with the federal government that was analyzed by the National Community Reinvestment Coalition show the bank makes relatively few loans to low- to moderate-income borrowers in Dallas County. Their analysis shows that Wells Fargo made 18% of its home purchase loans to low- to moderate- income borrowers, which is third from the bottom among banks in the county.

But, Wells Fargo shares in a?$400 million line of credit to FirstCashalong with Bank of Texas, Texas Capital Bank, Amegy Bank, Prosperity Bank, First Tennessee Bank, Independent Bank, Southside and BBVA Bank, according to SEC filings in 2016 and 2020.

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Redlining and Neighborhood Health

Before the pandemic devastated minority communities, banks and government officials starved them of capital.

Lower-income and minority neighborhoods that were intentionally cut off from lending and investment decades ago today suffer not only from reduced wealth and greater poverty, but from lower life expectancy and higher prevalence of chronic diseases that are risk factors for poor outcomes from COVID-19, a new study shows.

The new study, from the National Community Reinvestment Coalition (NCRC) with researchers from the University of Wisconsin–Milwaukee Joseph J. Zilber School of Public Health and the University of Richmond’s Digital Scholarship Lab, compared 1930’s maps of government-sanctioned lending discrimination zones with current census and public health data.

Table of Content

  • Executive Summary
  • Introduction
  • Redlining, the HOLC Maps and Segregation
  • Segregation, Public Health and COVID-19
  • Methods
  • Results
  • Discussion
  • Conclusion and Policy Recommendations
  • Citations
  • Appendix

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