The Color of Law

Several cities sued banks because of the enormous devastation that the foreclosure crisis imposed on African Americans. A case that the City of Memphis brought against Wells Fargo Bank was supported by affidavits of bank employees stating that they referred to subprime loans as “ghetto loans.” Bank supervisors instructed their marketing staffs to target solicitation to heavily African American zip codes, because residents there “weren’t savvy enough” to know they were being exploited. A sales group sought out elderly African Americans, believing they were particularly susceptible to pressure to take out high-cost loans. A similar suit by the City of Baltimore presented evidence that Wells Fargo established a unit staffed exclusively by African Americans whom supervisors instructed to visit black churches to market subprime loans. The bank had no similar practice of marketing such loans through white institutions.