Wells Fargo Bank on Thursday agreed to pay $175 million to settle allegations by the Department of Justice (DOJ) that it targeted black and Hispanic neighborhoods in cities such as Baltimore and Chicago and steered those borrowers into high-cost subprime loans.

The settlement will provide $125 million in compensation to nearly 34,000 borrowers harmed by Wells Fargo’s lending practices. Another $50 million will be allotted to eight cities to fund community improvements in neighborhoods hard-hit by foreclosures.

Subscribe Now

Access to a full range of industry content, analysis and expert commentary.

30-Day Free Trial

No credit card required. Access coverage of the securitization marketplace, including breaking news updated throughout the day.