African-Americans were the biggest victims of the subprime mortgage-lending fiasco that was in large part responsible for the nation’s weakened economy. On Monday, the NAACP and Wells Fargo opened a Financial Freedom Center, to be housed in Washington, D.C., whose mission is to protect minorities from predatory-lending practices and promote financial literacy.
The center is the outgrowth of a lawsuit filed by the civil rights organization last year that was dropped after the bank agreed to participate in the initiative. In addition to developing programs to help the center enact its mission, the bank will donate $2.5 million annually for the next five years to fund the center.
NAACP President and Chairman Benjamin Todd Jealous said that Wells Fargo was the one bank to step forward when his organizations sought financial industry partners to address lending problems in African-American communities and the alarming foreclosure rate.
“The mortgage industry as a whole probably did not behave very well and certainly was a contributor to the recession and the loss of many homes,” acknowledged Jon Campbell, Wells Fargo’s executive vice president of social responsibility. “We want to rebuild trust that Wells Fargo is doing everything possible to help people who can afford their homes to stay in them.”
According to a 2006 report from the Center for Responsible Lending, African-Americans and Latinos received a higher proportion of high-cost mortgages than any other group. The CRL estimates that eight to 10 percent of all African-American and Latino families who received a home loan in 2005 will be affected by subprime foreclosures.
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