By Yizhu Wang and Katy O'Donnell | Updated on Oct 07, 2026 at 05:43 PM
Wells Fargo & Co. shares fell nearly 2% after a report that the Department of Housing and Urban Development is investigating whether the bank violated fair-lending laws as it sought to boost homeownership among Black Americans.
The department sent Wells Fargo Chief Executive Officer Charlie Scharf a letter about the probe, according to the Wall Street Journal. A spokesperson for Wells Fargo declined to comment, while a representative for HUD didn’t immediately respond to a request for comment.
Well Fargo shares were down 1.8% to $80.03 at 12:30 p.m. in New York trading Wednesday.
Companies and institutions are facing increasing scrutiny over policies seeking to encourage diversity. The Trump administration has been working to root out race-based admission and hiring practices at US universities.
In 2022, Wells Fargo announced a $210 million effort to expand racial equity in residential lending after a Bloomberg News investigation found the bank approved Black homeowners seeking to refinance mortgages in the pandemic at a far lower rate than White ones. The racial disparities in home lending drew broader criticism, prompting New York City to stop opening any new Wells Fargo depository accounts following the investigation.
Read More: Wells Fargo Rejected Half Its Black Applicants in Mortgage Refinancing Boom
In 2023, Wells Fargo said it would shrink its US mortgage business to mainly focus on its existing customers and underserved communities. It decided to exit the correspondent mortgage business and reduce the size of its servicing portfolio. The bank was seeking to cut risk in the mortgage unit by making it smaller and simpler, Wells Fargo said at the time.