WASHINGTON, DC – As the nation celebrates Asian American and Pacific Islander (AAPI) Heritage Month, an Accountable.US review has found that the AAPI community would benefit from the Consumer Financial Protection Bureau (CFPB)’s efforts to rein in “junk fees” as two of the largest mortgage companies – Wells Fargo and Quicken Loans – tout troubling records on racial equity that have affected AAPI borrowers.
In July 2021, the CFPB issued a report on mortgage issues affecting the AAPI community, finding they pay an average of $618 more in home loan costs than white borrowers and face higher loan denial rates. As a result, the AAPI community has a homeownership rate of only 60%—15 percentage points less than white consumers — with homebuying falling during the pandemic due to the increase in anti-Asian crimes.
The AAPI community would benefit tremendously from a crackdown on junk fees as a top target for predatory and discriminatory practices by major financial institutions like Wells Fargo. The CFPB’s efforts to rein in junk fees would be a big step towards ensuring our economy is equitable for all.”
Liz Zelnick, spokesperson for Accountable.US
Accountable.US has extensively documented the impact of the financial service industry’s predatory “junk fees” – abusive, often-hidden fees and penalties that disproportionately prey on the poor and the CFPB has pledged to regulate. Seven major banks raked in $1.2 billion worth of overdraft and non-sufficient fund fees in 2021 – amounting to over 12% of the nearly $10 billion in profits they made in the same year.
Wells Fargo—the “largest bank home mortgage originator”—has balked at demands for racial equity audits after it disproportionately denied home refinancing applications from Asian Americans and other people of color and paid a $10 million settlement over its racial refinancing practices.
Quicken Loans’ Rocket Mortgage—2021’s biggest mortgage originator—has been criticized for perpetuating systemic inequality through its algorithms, with Asian American and other communities paying more in loan fees and interest despite not disclosing their race or demographic data.