HUD Secretary Scott Turner has launched a federal investigation into Wells Fargo over programs that allegedly provided home-loan assistance based on race. The probe puts one of the largest mortgage lenders in America under federal scrutiny for what Turner described as "race-based decision-making."
HUD says Wells Fargo publicly committed billions of dollars to housing initiatives that included race-based considerations. The department sent Wells Fargo CEO Charlie Scharf a letter putting the bank on notice that it is examining the bank's "mortgage lending policies, practices, and programs" under Section 805 of the Fair Housing Act. The investigation is being led by HUD's Office of Special Investigations.
Turner did not mince words. "Even if Wells Fargo did not violate the law, its practice of dividing Americans based on race is immoral, unethical and un-American," he said in a statement. "Wells Fargo and all of its employees that engaged in race-based decision-making should be ashamed of themselves." Turner says the Fair Housing Act requires Americans to be treated equally — full stop.
He was not the only one. Deputy Secretary Andrew Hughes said the Trump administration "will not stand for un-American and unlawful race-based mortgage lending practices from any financial institution." Assistant Secretary for Fair Housing and Equal Opportunity Craig Trainor put it this way: "The Fair Housing Act forbids racial discrimination in housing. It does not say: discriminate, so long as the discrimination is called a 'special purpose credit program' and justified as advancing 'racial equity in homeownership.'"
The programs under the microscope go back years. In 2017, Wells Fargo committed to lending $60 billion to qualified African American consumers for home purchases by 2027. In 2022, the bank announced a $210 million push to advance racial equity in homeownership, including a Special Purpose Credit Program tied to mortgage refinancing — $150 million for reduced rates and refinancing costs, plus $60 million in grants for homeowners of color. That push came after a Bloomberg investigation found the bank had turned down half of all refinancing applications from Black families in 2020. News of the HUD probe sent Wells Fargo shares sliding about 2 percent.
The investigation is the latest front in the Trump administration's move against DEI programs across sectors — and it puts a major spotlight on DEI in banking and housing. The question at the center of it is simple, and it is the one Turner keeps asking: should race play any role at all in determining who gets access to home-loan programs? The administration's answer is no. Wells Fargo's programs were built on yes.