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Wells Fargo to pay $175M to settle discrimination claims

Biggest US mortgage lender shutting down wholesale channel

Wells Fargo Bank has reached a settlement with the U.S. Department of Justice to resolve allegations that the bank systematically discriminated against African American and Hispanic borrowers. The Justice Department claims that Wells Fargo -- the largest home mortgage originator in the U.S. -- steered about 34,000 African American and Hispanic borrowers into riskier and more expensive subprime loans between 2004 and 2009, or charged them higher rates and fees than white borrowers. Wells Fargo, which denies the claims, will pay $125 million to wholesale borrowers the Justice Department believes were victims of discrimination due to their race or national origin. Wells Fargo will also pay $50 million to seven metro areas the justice department has determined to have a high number of impacted borrowers and were hard-hit by the housing crisis: Washington-Arlington-Alexandria, D.C.-Va.-Md.-W.Va.; Chicago-Naperville-Joliet, Ill.-Ind.-Wis.; Philadelphia-Camden-Wilmington, Pa.-N.J.-Del.-Md.;...