Wells Fargo is under federal investigation over mortgage programs designed to help Black Americans become homeowners, with the Trump administration examining whether the bank violated fair housing laws by offering favorable lending terms based on race.
The Department of Housing and Urban Development (HUD) launched the investigation on October 7, 2026, targeting initiatives that included a $60 billion lending commitment and a $210 million effort to expand homeownership opportunities. In a letter to Wells Fargo Chief Executive Charlie Scharf, HUD Assistant Secretary Craig Trainor accused the bank of "sorting" homeowners by race and offering different mortgage products or terms accordingly.
Housing Secretary Scott Turner criticized the bank's approach, calling its use of racial distinctions in lending "immoral, unethical and un-American." The agency is reviewing how Wells Fargo selected borrowers for its programs and whether similar practices remain in place.
In February 2017, Wells Fargo pledged $60 billion in mortgage lending to help create at least 250,000 Black homeowners by 2027. The commitment sought to expand access to financing in communities with historically lower homeownership rates.
The bank introduced another $210 million initiative in April 2022, including $150 million to help eligible Black homeowners reduce mortgage interest rates and refinancing costs. The remaining $60 million supported grants intended to expand homeownership opportunities in communities of color.
By late 2023, Wells Fargo reported reaching approximately 40% of its original lending target and helping about 5,100 customers refinance through its targeted assistance efforts. Those borrowers saved an average of approximately $100 per month, according to a racial equity assessment commissioned by the bank. Wells Fargo also reported exceeding its $150 million Special Purpose Credit Program commitment, an achievement HUD cited in its investigation.
The initiatives were introduced amid longstanding racial disparities in housing. According to the Pew Research Center, approximately 46% of Black households owned their homes in 2024, compared with 73% of white households. Wells Fargo has previously described its mortgage assistance programs as efforts to address such disparities and increase access to affordable credit.
Under the Fair Housing Act, mortgage lenders are prohibited from discriminating based on race, color, national origin and other protected characteristics. HUD is examining whether Wells Fargo's eligibility requirements and lending practices violated those protections by making certain benefits available based on borrowers' racial identities.
The programs were developed during a period when federal regulators encouraged lenders to use Special Purpose Credit Programs to expand access to financing. In February 2022, eight federal agencies issued guidance supporting these initiatives under the Equal Credit Opportunity Act, particularly when designed to address documented barriers to credit.
The Trump administration reversed that approach in 2026. On April 22, the Consumer Financial Protection Bureau amended Regulation B to prohibit the use of race, color, national origin or sex as eligibility factors in Special Purpose Credit Programs. The changes took effect July 21.
On August 25, seven federal agencies, including HUD and the Justice Department, withdrew the earlier guidance encouraging such programs. The actions changed the federal regulatory framework governing targeted lending initiatives, including the types of eligibility criteria lenders may use.
Wells Fargo's programs were introduced before those changes, and HUD is examining how they were structured and administered. Investigators are reviewing the bank's lending practices and public commitments to determine whether its mortgage assistance complied with federal fair housing protections.
HUD has ordered Wells Fargo to preserve records related to its mortgage programs, including electronic communications, and said initial information requests will follow within 10 business days of its October 7 letter. If investigators find reasonable cause to believe the bank violated the Fair Housing Act, the agency could pursue discrimination charges or refer the matter to the Justice Department.
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