Janus-Faced Banking: How Wells Fargo Profits on Communities of Color
Social geographer, David Harvey, is famous for having noted that economic crises often “reveal the rationality of fundamentally irrational systems.” For Harvey, a crisis discloses the “irrational rationalizers” of our contradictory capitalist arrangement. Philanthro-capitalism, or the popular practice of applying business strategies to social challenges, represents the very core of this contradiction. Firms participating in philanthro-capitalist (ad)ventures privately support the very oppressive systems—white supremacy, capitalism, patriarchy, to name a few —that they publicly denounce.
Enter Wells Fargo, the nation’s fourth largest bank and the principal mortgage originator in the United States.
Earlier this summer Wells Fargo announced its historic $3.395 million grant in support of the Hispanic Scholarship Fund (HSF). The grant represents the single largest corporate contribution to HSF, “the nation’s premier not-for-profit organization supporting Hispanic higher education.” Founded in 1975, “HSF provides American families with the financial and educational resources they need to achieve a college education.” To date, HSF has awarded over $360 million in scholarships and has supported a broad range of outreach and education programs to assist students and their families navigate collegiate life, from gaining admission and securing financial aid to finding employment after graduation.
HSF’s strategic vision includes “build[ing] a coalition of corporate and philanthropic partners committed to increasing Hispanic degree attainment.”
But Wells Fargo’s largess is as generous as it is ironic. Generous because $3.395 million is a large chunk of change, but ironic because of Wells Fargo’s simultaneously antagonistic relationship with the “Latin community.”
According to the Securities and Exchange Commission (SEC)—the federal agency responsible for protecting investors and maintaining fair markets—Wells Fargo currently holds somewhere between 4,400,000-4,700,000 shares in the GEO Group, the nation’s largest private detention owner and operator. With over 4 million shares of the GEO Group valued at close to $90 million, Wells Fargo owns nearly 8 percent of the company.
The GEO Group owns and/or operates eighteen immigrant detention centers around the country and houses close to 50 percent of all detained immigrants, the preponderance of whom are Latin. Since 2006 the GEO group has been awarded over $1.3 billion in contracts from Immigrations and Custom Enforcement (ICE) through the Department of Homeland Security. The company, which posted 1.6 billion in revenues last year, relies on ICE for 14% of its total business operations.
If this tale isn’t serpentine enough, a second irony emerged last week when Wells Fargo “agreed to pay at least $175 million to settle accusations that its independent brokers discriminated against black and Hispanic borrowers during the housing boom.” According to the New York Times, an investigation by the Justice Department’s civil rights division found that “mortgage brokers working with Wells Fargo had charged higher fees and rates to more than 30,000 minority borrowers across the country than they had to white borrowers who posed the same credit risk.” l Furthermore, the Justice Department discovered that Wells Fargo brokers “steered more than 4,000 minority borrowers into costlier subprime mortgages when white borrowers with similar credit risk profiles had received regular loans.”
The contradictory nature of philanthro-capitalism is as lucid as it is lurid. We must demand that Wells Fargo immediately end all business practices that profit from community depletion and disinvestment. We must demand that Wells Fargo divest from the GEO Group and cease its well-publicized predatory machinations that disproportionately affect communities of color. This must be done, and it must be done now.
If Wells Fargo refuses to divest from the GEO Group, then we’ll have to do it for them. For more information on how to close your Wells Fargo bank account please see the National Prison Divestment Campaign’s website.