There's no question that Detroit, four Wayne County suburbs and local home buyers benefit from a Wells Fargo program announced last month. But what the national bank depicts as generosity is part of a court settlement, Rolling Stone points out under the headline "Wells Fargo's Master Spin Job."
"Reporters and politicians are lining up to congratulate Wells Fargo for its multimillion-dollar neighborhood grant program – but they're leaving out one small detail," the publication says. "Wells Fargo was forced to launch HomeLIFT," the program's name.
Reporter Matt Taibbi names Mayor Mike Duggan, the Detroit Free Press and Crain's Detroit Business as among those letting the big bank seem voluntarily civic-minded.
He lays out the background -- a July 2014 foreclosure fraud settlement by Wells in a Northern California federal court:
The terms mandated that the bank spend $67 million on a series of measures to repair its reputation in communities hit the hardest by foreclosures and robo-signing. Enter HomeLIFT.
Under the settlement, Wells had to dedicate $36 million in homeowner assistance to cities like Fresno, Bakersfield, Detroit, Albuquerque, Virginia Beach and New Haven. . . .
Fast forward to [September]. Wells Fargo, fulfilling the terms of the settlement it fought against bitterly in the lawsuit, launched down payment assistance programs in cities all over America.
In city after city, Wells executives announced their plans, then patted themselves on the back for their generosity, always neglecting to mention the . . . suit.
In the Detroit area, for instance, a Wells spokesman spoke proudly of the $5.25 million it will be spending on HomeLIFT:
"While the Wayne County economy is showing signs of improvement, many families have yet to re-enter the housing market because they struggle with making a down payment," said a seemingly empathetic Russ Cross, a Wells senior vice president.
"Combined with financial education," Cross went on, "these down payment assistance grants can make a tremendous difference for people who want to own a home in one of these five Wayne County cities."
Cross never mentioned that Wells launched HomeLIFT because it had to. The $5.25 million it spent on HomeLIFT in Detroit was exactly the number mandated by the . . . settlement.
Taibbi sticks with Detroit, and links to coverage by Crain's on Sept. 17 and by the Freep four days later, to illustrate a "pattern repeated in virtually every one of the communities where Wells was forced to make an investment."
Detroit Mayor Mike Duggan slobbered all over Wells in a statement about the program. "This innovative public-private partnership will make a significant difference for eligible homebuyers," said Duggan.
It was bad enough that Wells bragged about its court-mandated penance, and maybe a little worse that local pols helped out with the verbal ribbon-cutting. But how about the local reporters who chimed in with positive stories about these altruistic programs?
"Wells Fargo Offers $15K down payment to help home buyers," wrote the Detroit Free Press. "Potential home buyers in Detroit and other communities will soon have a new source of down payment assistance…"
"Wells Fargo Program Aims to Boost Home Ownership in Wayne County Cities," piped in Crain's Detroit Business.
Rolling Stone's writer acknowledges that it's not stunning "when a bloodless too-big-to-fail corporation tries to take credit for something it was forced to do. But that doesn't mean we shouldn't call them on it."
Tip of the hat to Steve Neavling of Motor City Muckraker for a Facebook link to Rolling Stone's coverage.
Rolling Stone links to this Sept. 17 article in Crain's, which quotes Mayor Mike Duggan from a Wells Fargo press release.
