Updated 07/13/2012 04:41 PM
Wells Fargo blames independent mortgage brokers for discrimination settlement
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CHARLOTTE -- Wells Fargo will stop working with independent mortgage brokers in the wake of a multi-million dollar settlement over mortgage discrimination.
The San Francisco-based bank agreed to pay $175 million to settle claims that the bank discriminated against minorities in mortgage lending. Wells blamed third party brokers for the controversy and says ending those partnerships will allow the bank to ensure fair lending practices.
But some brokers who had nothing to do with the discrimination say they're being punished for other people's bad actions.
"The bad originators have been weeded out with all of the regulation, with all the licensing requirements on this side of the business," said Scott Jenkins with Bridgewater Capital. "So you won't see any of the stuff that went on from 2005 to 2009 in today's marketplace. I mean you just can't do it."
Wells Fargo does not admit any wrongdoing in the settlement and notes that it made the decision about independent brokers on its own.
Company executives say the $175 million fee is included in the bank's second-quarter operating losses.