SKN | Wells Fargo Faces New HUD Review of Fair-Lending Practices

Key Takeaways:

• Wells Fargo is facing a planned U.S. Department of Housing and Urban Development review of its compliance with fair-lending laws following allegations concerning the treatment of Black and other minority homeowners.
• The scrutiny focuses on whether Wells Fargo’s lending practices resulted in different products or terms being offered based on race.
• The review comes as Wells Fargo has made substantial progress in resolving its longstanding regulatory issues, including the termination of 14 consent orders since 2019 and the removal of its Federal Reserve asset cap in 2025.
• For the bank, the latest review introduces another compliance and reputational consideration as it continues to prioritize profitability, risk management and client relationships.

Wells Fargo is facing renewed regulatory scrutiny after the U.S. Department of Housing and Urban Development reportedly notified CEO Charlie Scharf that it plans to examine the bank’s compliance with fair-lending laws. The review creates a new regulatory consideration for Wells Fargo just months after the bank reached important milestones in resolving its longstanding supervisory issues.

HUD Targets Wells Fargo Lending Practices

According to a Wall Street Journal report cited by Yahoo Finance, HUD plans to investigate allegations that Wells Fargo favored Black and other minority homeowners. The review centers on whether the bank used a strategy described by HUD as “sorting” homeowners, potentially resulting in different lending products or terms based on race.

HUD Secretary Scott Turner said the agency plans to conduct a full review of Wells Fargo’s statements and practices. The scrutiny is connected to a broader review of similar initiatives at other banks, according to the report.

Review Follows Wells Fargo’s Minority Homeownership Initiative

The investigation relates to Wells Fargo’s nearly decade-long efforts to address the homeownership gap among Black Americans. In 2017, the bank committed $60 billion in loans with the goal of helping create at least 250,000 Black homeowners by 2027.

Wells Fargo expanded the initiative in 2022 by offering to refinance minority-owned homes using its own funds. By late 2023, the bank had reportedly fulfilled approximately 40% of its original lending commitment and helped refinance around 5,100 customers.

New Scrutiny Comes as Regulatory Remediation Advances

The timing is significant because Wells Fargo has made considerable progress addressing its previous regulatory problems. Since 2019, the bank has terminated 14 consent orders. The Federal Reserve removed its nearly seven-year asset cap in June 2025, while its 2018 enforcement action concerning governance and risk management was closed in March 2026.

That progress contributed to S&P Global Ratings upgrading Wells Fargo’s long-term issuer credit rating to A- from BBB+ last month, with a stable outlook. S&P cited improvements in risk management, corporate culture and oversight, alongside stronger profitability and deeper client relationships.

Compliance Remains Central to Wells Fargo’s Growth Strategy

For Wells Fargo, the HUD review introduces another layer of regulatory and reputational risk as the bank works to build on its improved operating position. A finding that lending products or terms differed unlawfully could result in additional compliance requirements and potentially increase remediation costs.

The key issue for investors is therefore not the immediate market reaction but whether the review develops into a broader supervisory matter. Wells Fargo’s response, continued regulatory remediation, profitability and client relationships will remain important indicators of whether the bank can maintain its recent momentum while managing renewed scrutiny of its lending practices.

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