US civil rights group sues banks for racist lending

The NAACP, a leading African-American civil rights group, on Friday filed two separate lawsuits against US lending titans Wells Fargo and HSBC, accusing them of "institutionalized racism."

The lawsuits, filed in California, allege that "African-American homeowners who received subprime mortgage loans from these lenders were more than 30 percent more likely to be issued a higher rate loan than Caucasian borrowers with the same qualifications," the NAACP said in a statement.

The National Association for the Advancement of Colored People (NAACP) said that wealthy African-Americans were more than twice as likely to receive high cost subprime loans than their lower income white counterparts, in what it described as ongoing racially discriminatory lending practices.

"These banks are getting billions in bailout money, yet think that they can get away with business as usual," said NAACP lawyer Austin Tighe.

"Predatory lending policies and practices are legally actionable, morally reprehensible and fiscally irresponsible."

Earlier this year, a federal court denied a motion to dismiss a lawsuit against other lenders sued by the NAACP for racially discriminatory lending practices.

The federal court said the NAACP had standing to bring the lawsuit, and ordered the lenders, which included Bear Sterns Residential Mortgage Corporation, Chase Bank USA and Citimortgage, to turn over information and documents about their lending policies and practices.

"Lenders named in the suits on average made high-cost subprime loans to higher qualified African-Americans 54 percent of the time, compared to 23 percent of the time for Caucasians," said NAACP interim general counsel Angela Ciccolo in a statement.

"Our lawsuit aims to change the policies and practices which lead to those results."