Wintrust’s $7B mortgage business accused of discrimination

Wintrust Financial, a Rosemont, Illinois-based financial company, was accused in a lawsuit filed of systemic discrimination against Black home buyers in its mortage business.

The suit, which is seeking class-action status, was filed in federal court in Chicago on May 25. The litigation was filed by Stowell & Friedman, a civil rights law firm that has won major employment discrimination settlements from Wall Street firms. The litigation was first reported by Crain’s.

This is not the first time Stowell & Friedman has pursued mortgage lenders for discrimination. The firm is also co-counsel in a class-action suit against San Francisco-based Wells Fargo, the third-largest bank in the U.S., where it accused the bank of racial discrimination in its mortgage business.

Unlike Wells Fargo, Wintrust is a regional company and has 15 banks in the Chicago area and southern Wisconsin. It has $50.3 billion in assets, and operates a national mortgage business that originated $6.8 billion in loans in 2021.

“Wintrust has created artificial, arbitrary, and unnecessary barriers to fair housing opportunities for Black and/or African American borrowers,” the complaint said. “Wintrust’s policies have discriminatorily extracted an enormous amount of wealth out of Black and/or African American households through higher costs, fees, and interest rates than charged to non-Black, non-African Americans.”

Stowell & Friedman filed the suit on behalf of Kathleen Bankhead, an assistant Cook County state’s attorney and then an independent juvenile ombudsman for the Illinois Department of Juvenile Justice. The suit alleges that Bankhead had to pay more in fees and rates for the purchase of her home in a “majority-minority” neighborhood in Chicago than what non-Black home buyers had to pay.

This was “consistent with Wintrust’s nationwide policies and practices,” according to the lawsuit.

Wintrust approved almost 69 percent of mortgage refinancing applications from white borrowers, whereas they only approved 56 percent of those applications from Black borrowers, according to 2020 Home Mortgage Disclosure statistics cited in the lawsuit.

“While we are unable to discuss the specifics of pending litigation matters, we can say that we believe that this lawsuit is without merit and will defend ourselves vigorously against the allegations in this case,” a statement from Wintrust said. “During our more than 30-year history, Wintrust and its employees have taken great pride and care to treat all of our customers equally and respectfully. It is a core value of who we are and how we do business in the numerous communities we serve.”

The complaint also says that Black borrowers receive higher average interest rates than white borrowers, at 3.31 percent and 3.21 percent, respectively.

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