The NAACP sued mortgage and banking units of Wells Fargo & Co (WFC.N) and HSBC Holdings Plc(HSBA.L) on Friday, accusing them of charging excessive rates to African-Americans who took out subprime mortgages.
According to complaints filed with the U.S. district court in Los Angeles, the National Association for the Advancement of Colored People said Wells Fargo and HSBC subjected African-American borrowers to "disparate adverse treatment" by imposing more onerous loan terms than on white borrowers.
The civil rights group also said the lenders wrongfully steered borrowers to less-favorable loans than they qualified for. It said African-Americans were about one-third more likely to be issued higher-rate loans than white borrowers with the same qualifications.
Subprime mortgages go to borrowers with weaker credit.
The lawsuits follow several similar lawsuits filed against other large mortgage providers, including Citigroup Inc (C.N) and JPMorgan Chase & Co (JPM.N).
In a statement, Wells Fargo called the NAACP allegations "totally unfounded and reckless," and said it will mount a vigorous defense. "We have never tolerated, and will never tolerate, discrimination in any way," the bank said.
HSBC declined to comment on its lawsuit, but said: "We stand by our fair lending and consumer protection practices, and we are confident that we are treating our customers fairly and with integrity."
The cases are NAACP v. Wells Fargo Bank NA and NAACP v. HSBC Mortgage Corp, U.S. District Court, Central District of California (Los Angeles), No. 07-0794. (Reporting by Jonathan Stempel, editing by Gerald E. McCormick)
