SUMMARY: In September 2022, a “powerful alliance of trade groups” filed a lawsuit against the Consumer Financial Protection Bureau’s (CFPB’s) anti-discrimination enforcement practices, with lead plaintiff the U.S. Chamber of Commerce accusing the Bureau of “‘an ideological agenda.’” The lawsuit’s co-plaintiffs include other industry groups like the American Bankers Association, Consumer Bankers Association, the Independent Bankers Association of Texas, the Texas Bankers Association, the Texas Association Of Business, and the Longview Chamber of Commerce.
Consumer advocate group, the National Consumer Law Center, fired back at the lawsuit, calling the industry lawsuit “outrageous” and noting that consumers of color “‘have long faced discrimination’” in financial services and calling the banking industry’s antiracist statements “meaningless” in light of the lawsuit against the CFPB.
An Accountable.US review of the banking industry groups behind the lawsuit has found that banks represented on their boards of directors have faced a wide array of controversies over discrimination on the grounds of race, gender, sexual orientation, and disability over the past decade. This includes at least $961,908,000 in fines or settlements with regulators, consumer advocacy groups, and individuals harmed by these banks’ conduct.
Notably, many of these banks have made hypocritical statements in support of racial justice and fighting discrimination including:
- RHETORIC: Wells Fargo CEO Charlie Scharf has said “‘Black Lives Matter,’” stated that discrimination “‘must not continue,’” and that the rise in violent acts and xenophobia toward Asian Americans and Pacific Islanders “‘is unacceptable.’”
- REALITY: The bank reached a $234 million Justice Department settlement in 2012 for discriminating against thousands of Black and Latinx mortgage borrowers and a $10 million settlement with the city of Philadelphia in 2019 for reverse redlining.
- RHETORIC: The bank has claimed it is committed to “prevent[ing] discriminatory practices,” stated that the bank “‘will not tolerate acts of racism in any form’” and that “we firmly believe all employees should […] live free of discrimination.”
- REALITY: The bank faced the Justice Department’s “largest residential fair lending settlement” in 2012, agreeing to pay $335 million after its Countrywide subsidiary charged Black and Latino borrowers higher fees and steered them into subprime mortgages.
- RHETORIC: JPMorgan Chase CEO Jamie Dimon wrote he is “disgusted by racism and hate in any form,” and the bank has committed to “fighting against racism and discrimination wherever and however it exists.”
- REALITY: The bank settled with the U.S. Justice Department for $55 million in 2017 over allegations the bank allowed mortgage brokers to discriminate against minority borrowers.
- RHETORIC: The bank claims it “strongly opposes racism and discrimination in any form” and its CEO said “we reject racism in all of its forms.”
- REALITY: The bank was sued by the Houston NAACP for $38 billion in 2018 for disproportionately closing branches in minority communities and was found to heavily favor white employees for executive and senior management roles.
- RHETORIC: CEO Jane Fraser admitted “there is still more work to be done to advance anti-racist practices both within our firm and across the industry.”
- REALITY: The bank was fined $25 million by the Office of the Comptroller of the Currency in 2019 for denying mortgage borrowers preferential rates on the basis of “race color, or other factors.
- RHETORIC: The bank claims it does “not tolerate harassment or discrimination,” and its Chief Diversity Officer said “we will not let up” when it comes to addressing racial disparities.
- REALITY: The bank faced a lawsuit from a former auto loan underwriter who alleged a “‘racist environment’” in 2019, a federal complaint in 2014 about the bank allowing foreclosed properties to become blighted in Black neighborhoods, and a confidential settlement in 2021 with a Black customer alleging racial discrimination.
- RHETORIC: Goldman Sachs said that “there is no place for discrimination of any kind, at any level, at this firm,” that the bank has “no tolerance for xenophobia or bigotry of any kind,” and condemned “systemic discrimination against Black people.”
- REALITY: The bank has faced multiple controversies over racial, gender, and sexual orientation discrimination, including a former senior executive writing a book about “a culture of exclusion in the upper echelons” of the bank and a former Black wealth manager claiming the bank’s “‘discriminatory mentality starts at the top.’”
- RHETORIC: CEO Bill Demchak said “PNC is against discrimination in every form,” adding that banks need to use their resources to “address racism, discrimination, bigotry, bias and economic and health disparities that plague our country.”
- REALITY: The bank agreed to a $35 million Justice Department settlement in 2013 after PNC acquisition National City Bank “systematically overcharged Black and Hispanic mortgage borrowers.”
Washington Federal Bank (WaFD), whose President and CEO Brent Beardall is currently serving a three-year term on the American Bankers Association (ABA) board of directors:
- RHETORIC: CEO Brent Beardall admitted that “we have real issues that need to be addressed” including “systemic racism” and “the wealth gap,”
- REALITY: The bank has faced two separate CFPB penalties totaling $234,000 for massive mortgage data errors the Bureau said could hinder efforts to fight discrimination. Former CFPB Director Richard Cordray said WaFD’s flawed data “‘makes it more difficult for the CFPB to discover and stop discriminatory lending.’”
- RHETORIC: In 2020, the bank’s then-CEO and current Executive Chair wrote, “we must be intolerant of ignorance, intolerant of hate and intolerant of inaction” and that she will “commit to striving to create a future absent of racism, bigotry and the systems that perpetuate inequality, systemic and often unseen racism.”
- REALITY: The bank agreed to a $225 million settlement in 2014 with the CFPB for deceptive and discriminatory practices while Synchrony was known as GE Retail Bank.
- RHETORIC: In 2020, the bank’s then-CEO and Current Executive Chairman Greg Carmichael announced that “racism and discrimination in any form is not tolerated.”
- REALITY: The bank settled with the CFPB and Justice Department for $18 million in 2015 after charging “higher dealer markups” to Black and Latino borrowers.
Keycorp, which is represented on CBA’s board by its Head of Consumer Banking:
- RHETORIC: The bank has said “racism, discrimination, and hatred of any kind can have no place in our workplaces and communities” and its CEO Chris Gorman claimed he was “committed to continuing to speak out and taking meaningful action.”
- REALITY: The bank has had a 20% loan denial gap between Black and white applicants, was accused of discrimination by a Black customer, and acquired another bank that faced a Justice Department fair lending investigation.