Housing officials from President Donald Trump’s administration are launching an investigation into Wells Fargo over efforts to improve Black homeownership, according to a report from the Wall Street Journal.

The Department of Housing and Urban Development sent a letter to the bank’s chief executive, Charlie Scharf, saying it is going to look into whether the bank violated fair-lending laws by favoring Black or other minority homeowners, WSJ reported.

HUD did not provide a comment as of Wednesday afternoon. Wells Fargo declined to comment.

Past lending scrutiny for Wells Fargo

While the new federal probe looks into whether minority buyers received preferential terms, earlier reports this year focused on claims that minority applicants were unfairly turned away.

In April, Americans for Financial Reform’s Education Fund released a study stating that the bank’s mortgage rejection rates for minorities in Charlotte and North Carolina far outpaced those of white applicants.

The study covered a five-year period from 2020 through 2024, using federal data from the Home Mortgage Disclosure Act. Banks are required to report mortgage applications and lending decisions. The study looked at 24,544 conventional home purchase mortgage applications and more than 16,000 loan originations in North Carolina.

Statewide, the bank denied 22.5% of Black, 25.6% of Latino, and 20.3% of Asian applicants — compared with 10.1% of white applicants over the five-year period, according to the report. In Charlotte, the overall denial rate was 12% for the five-year period. The denial rate for Black applicants was 20.5%, 23.5% for Latinos, and 16.2% for Asians. Those rates were more than double the white rejection rate of 7.9%.

And in May, a federal judge approved a $110 million settlement with Wells Fargo executives over allegations of systemic racial discrimination in mortgage lending. The decision, handed down in Northern California federal court, unlocks a major surge in local mortgage assistance for the Charlotte area, the Observer previously reported.

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