Essex County Kicks Wells Fargo To Curb, Withdraws $3.8M From Bank

ESSEX COUNTY, NJ — Every year, Essex County does business with almost a dozen banks and shuffles around millions of dollars while executing its annual budget. But soon, Wells Fargo won’t be among the financial institutions that benefit from the county’s cash.

On Wednesday, officials announced that the county is in the process of withdrawing all of its funds from the banking giant due to its alleged “predatory lending schemes and aggressive foreclosure practices.”

Essex County maintains accounts with 11 financial institutions. It previously had about $3.8 million with Wells Fargo, officials stated.

According to Essex County Executive Joseph DiVincenzo Jr., the county began withdrawing funds from Wells Fargo in mid-June, a plan that gained steam after it was discovered last week that the financial giant may have improperly foreclosed on 400 homes between April 2010 and October 2015.

In that case, about 625 borrowers should have qualified for a loan modification under a program the U.S. Treasury Department established in 2009 to help homeowners who were struggling to make mortgage payments. However, a Wells Fargo computer error improperly excluded those borrowers, 400 of whom eventually had their homes foreclosed upon, Reuters.com reported.

On Wednesday, DiVincenzo said that the latest allegations against Wells Fargo were just the tip of the iceberg.

“The predatory lending schemes and aggressive foreclosure proceedings practiced by Wells Fargo destabilizes neighborhoods and has a negative impact on families and the community,” DiVincenzo charged.

“In addition, the recent reports that Wells Fargo denied mortgage modifications and ultimately foreclosed on those properties are further evidence of the bank’s malicious and insensitive treatment of people who placed their trust and financial futures with the bank,” the county executive said.

DiVincenzo concluded:

“As a county government we cannot control how banks operate, but we can support our residents and homeowners by sending a strong message that Essex County will only invest its funds with institutions that have client-friendly business practices and support community building.”

Patch reached out to Wells Fargo on Wednesday seeking comment about the county’s choice to yank its funds from their coffers and received the following reply:

“We were surprised and disappointed to learn of the county’s decision in the press. We have reached out to the county and look forward to discussing their concerns.”

The county still has some outstanding checks with the bank in some of its accounts, but the withdrawal process is expected to be completed soon, an Essex County spokesperson told Patch on Wednesday.

WELLS FARGO AND ESSEX COUNTY

A consortium of local activist groups and labor unions have been blasting Wells Fargo for its alleged negative impacts on the Essex County community for years.

Earlier this summer, several members of Newark's African-American clergy community raised concerns about foreclosures in Essex County, where about 3,000 foreclosure notices were executed in 2017, TAP Into Newark reported.

In April 2017, East Orange officials announced that the municipality was yanking its funds from Wells Fargo, reportedly making it the first New Jersey city to take such an action against the embattled bank.

"In East Orange, Wells Fargo remains one of the top foreclosing banks, holding nearly 13 percent of the city's vacant and abandoned properties," East Orange Mayor Lester Taylor III said. "As mayor of the second-largest city in Essex County and the 20th-largest in New Jersey, I am committed to sending a strong message that we will not do business nor consider doing business with any institution that intentionally preys upon homeowners in our city."

"Business as usual is no longer acceptable," East Orange Councilman Ted Green asserted. "For many years, the residents of East Orange have been subjected to predatory lending and aggressive foreclosure practices by Wells Fargo. The consequences of stolen wealth have been devastating to families of East Orange."

A Wells Fargo spokesperson previously provided Patch with the following statement about East Orange’s decision:

"While we have not had a business relationship with the City of East Orange in recent years, Wells Fargo has always been a leader in investing in New Jersey's low-to-moderate income communities. For the past six years Wells Fargo has been the nation's leading residential mortgage lender to racially and ethnically diverse home buyers and we are dedicated to expanding sustainable home ownership in these communities. We have recently announced a $60 billion lending commitment to raise home ownership rates among demographics that are below the general population, and have contributed over $7 million to schools and nonprofit organizations across New Jersey."

• See related article: New Jersey Town Takes On Wells Fargo Bank

The battle against Wells Fargo in East Orange will continue on Thursday, Aug. 9 when the NJ Hearing of Citizens Coalition for a Moratorium on Foreclosures meets at 6 p.m. at the East Orange City Council Chambers, 44 City Hall Plaza.

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