Shame on the city of Baltimore, which has filed a lawsuit against Wells Fargo for lending money to people who are serious credit risks and then foreclosing on those people when they didn’t pay their bills. The same goes for Cleveland, which has filed a similar lawsuit. According to the Sacramento Business Journal, “Baltimore’s civil suit contends Wells is responsible for foreclosures that are reducing the city’s tax revenues while increasing costs for such measures as increased police and fire protection in distressed neighborhoods.” Yes, instead, Wells Fargo should just refuse to lend money to people who are high credit risks (meanwhile being accused of stinginess, bigotry, and whatnot) and then, if people don’t pay their bills, the bank should just ignore it, and shift the cost to people who are responsible and do pay their bills.
Lending money to people who are credit risks—people with uncertain employment, a bad history, or other risk factors—costs money, because such people tend to default. If banks can’t make up for that increased cost through higher interest rates elsewhere, or at other times, they won’t extend those risky loans at all. It will be more difficult for people who need loans to get them, and the problems of the poor and residents of the inner city will hardly improve. But it makes politicians look like the good guys fighting the evil banker man, so here come the lawsuits—and the smears. The article includes the “do you still beat your wife” section: “Wells Fargo spokesman Kevin Waetke rejected the Baltimore’s contention that race was a factor in the bank’s pricing of mortgage loans.” Yeah, because what black people in Baltimore really need is for banks to go elsewhere to lend their money. This whole thing is race-baiting class warfare, and it’s disgusting.
Cleveland’s case even includes our favorite—the vaguest tort of all—“public nuisance,” a doctrine which no lawyer can explain and no judge can understand; the catch-all that allows government to sue you for doing anything it doesn’t like.
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