When the NAACP filed suit against Wells Fargo for allegedly targeting black people regardless of income or credit history or sub-prime loans, the bank became a symbol of how greed and racism contributed to the outsize effect the foreclosure crisis has had on the black community. In court affidavits, former Wells Fargo employees testified that the bank deliberately targeted the sub-prime loans -- or "ghetto loans" as they were referred to internally -- at "mud people." In Baltimore, for example, 71 percent of the homes vacated due to foreclosure on a Wells Fargo loan were in black neighborhoods. Wells Fargo was the eighth largest recipient of bailout money -- they received $25 billion.
Wells Fargo, however, has also long been a sponsor of the State of the Black Union, Tavis Smiley's annual black political symposium. Mary Kane reported that Smiley had been hosting "wealth building seminars" in black communities since 2005 -- according to Illinois Attorney General Lisa Madigan, the seminars were part of Wells Fargo's attempt to lure black voters into buying sub-prime loans. One employee was even told she was "too white" to speak at one of the seminars -- the company wanted a face nervous black folks buying a home for the first time could trust. A black face. Someone well-known and trustworthy. Someone like Tavis Smiley. Wells Fargo maintains they have done nothing wrong and are fighting the suit.
Smiley would also hardly be the first important black political figure to have ties to sub-prime lenders. As Stephanie Mercimer reported for Mother Jones last year, Charles Steele Jr. of the Southern Christian Leadership Conference defended sub-prime lenders in the Washington Post last year, Al Sharpton has cut commercials for LoanMax, Jesse Jackson's Rainbow/PUSH Coalition has worked with Compucredit on "job fairs and economic summits," and the Urban Leage has worked with the Consumer Financial Services Association to conduct "financial literacy seminars."
“I cut everything off with Wells Fargo,” Smiley declared. He said the move cost “a lot of money”; he said he did not know how much.
I'm not sure how much moving away from Wells Fargo cost Smiley. But if the information in the suits against Wells Fargo are accurate, probably less than the folks who lost their homes because the bank foreclosed on their "ghetto loan."
The revelation of Smiley's efforts in helping Wells Fargo sell sub-prime loans in the black community is likely to further erode Smiley's standing among black folks. During the 2008 campaign, Smiley criticized Barack Obama for not attending one of his symposiums, which many felt was somewhat self-serving and unfair. At the time, Smiley said, "Just because Barack Obama is black, doesn't mean he gets a pass on being held accountable on issues that matter to black people."
-- A. Serwer
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