Wells Fargo faces regulator probe over Black homeownership efforts

The Wall Street Journal reports the bank is under scrutiny over a program meant to expand Black homeownership.

Wells Fargo is facing a regulator probe tied to its efforts to boost Black homeownership, the Wall Street Journal reports.

The probe is the second regulatory thread to open on the bank in recent weeks. The New York Fed has been examining Wells Fargo, along with JPMorgan, Barclays and Morgan Stanley, since spring, asking about private credit exposure, risk management and collateral quality. That review was first reported on October 5. The new matter is separate, and touches fair-lending compliance rather than balance-sheet risk.

The scrutiny comes after Wells Fargo's chief financial officer, Michael Santomassimo, told investors in mid-September that delinquency trends were stable, loan growth was healthy and the bank could beat expectations on net interest margin. A fair-lending probe gives regulators a new point of friction just as the bank was trying to project operational strength.

A probe tied to a program meant to expand Black homeownership carries reputational and legal exposure beyond the kind of findings that come from routine supervisory checks, since it raises questions of fair-lending compliance rather than risk management alone.