Commentator Tavis Smiley said Friday he has severed all ties with Wells Fargo & Co., owner of Wells Fargo Bank and Wells Fargo Home Mortgage Inc., until charges that the company unfairly steered African American borrowers into costly subprime mortgages are resolved.
Wells Fargo sponsored Smiley's radio show on Public Radio International, and underwrote the annual C-Span-televised "State of the Black Union" conference that Smiley organizes. Smiley's foundation also distributed Wells Fargo materials to young people at foundation events, he told Journal-isms.
"I cut everything off with Wells Fargo," Smiley declared. He said the move cost "a lot of money"; he said he did not know how much.
Smiley spoke as an article by Mary Kane in the Washington Independent, a Web-only project of the Center for Independent Media, circulated. It began, "As the housing market began booming in mid-2000, Wells Fargo & Co. teamed up with prominent African American commentator and PBS talk show host Tavis Smiley and financial author Kelvin Boston, the host of 'Moneywise,' a multicultural financial affairs show, to host something called 'Wealth Building” seminars in black neighborhoods.'"
It continued, "But what appeared on the surface as a way to help black borrowers build wealth was actually just the opposite, according to a little-noticed explanation of the 'Wealth Building' seminar strategy, contained in a lawsuit recently filed by Illinois Attorney General Lisa Madigan.
"Wells’ plan for the seminars all along was to target black borrowers for higher-cost subprime mortgages, not for wealth-building, the suit charged. And the seminars were a part of the bank’s overall illegal and discriminatory practice of steering black and Hispanic borrowers into riskier and more expensive loans, the suit said."
"I was never a spokesman for Wells Fargo," Smiley said. "I hate payday loans. My role in these seminars was about financial literacy and wealth building."
Smiley first responded to the allegations with a note posted on his Web site after the NAACP filed suit earlier in the year.
Referring to the Tavis Smiley Group, it says, "Our mission at TSG is to empower and speak for the underserved. As such, TSG always will support any official and credible investigation of allegations of any company accused of disrespecting communities of color with discriminatory practices. It is our hope that in the most multicultural, multiracial, multiethnic America ever, communities of color will get the respect they deserve."
Lawsuits against Wells Fargo and HSBC Mortgage Corp. were filed in Los Angeles on March 13. "San Francisco-based Wells and London-based HSBC issued heated denials and said they would defend themselves aggressively," E. Scott Reckard wrote then for the Los Angeles Times.
Later, the city of Baltimore and the state of Illinois filed their own suits against Wells Fargo.
The NAACP had also filed discrimination lawsuits against Citigroup, JPMorgan Chase and General Electric Co.'s subprime lending unit, WMC Mortgage.
Smiley said his relationship with Wells Fargo was a "package deal." In return for the company helping to finance his radio show, he went on the road for Wells Fargo. He said he owns his own radio and television show and while it frees him from network control, it also requires him to come up with his own financing.
~ Journalisms
Last December at a black-tie industry gala in New York City's famed Plaza Hotel, Ken Lewis strode past other top financial executives to the podium to accept the award for Banker of the Year. The financial industry was crashing, but Lewis looked to be at the top of his game. The CEO told the crowd, "It is incumbent upon all of us, especially those of us whose performance has left us in a strengthened leadership position, to help our industry find a new balance between our desire for economic growth and our need for market stability."
