The city of Sacramento has filed a federal lawsuit against Wells Fargo alleging the banking giant steers African American and Latino borrowers into high-risk and high-cost mortgages.
The suit, filed Friday in U.S. District Court in Sacramento, also seeks monetary damages against Wells Fargo, alleging the mortgages forced the city “to divert resources intended for other programs” to provide services to blighted neighborhoods impacted by the lending practices.
“These illegal practices suppressed property values in minority and low income communities in Sacramento, reduced the city’s property tax revenues, and increased the cost of providing municipal services such as police, fire fighting and code enforcement,” the city’s lawsuit reads.
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