Illinois Files Discrimination Suit Against Wells Fargo

 

CHICAGO (Reuters) -- Illinois Attorney General Lisa Madigan filed suit Friday against Wells Fargo & Co., accusing the second-largest mortgage lender of steering blacks and Latinos into high-cost subprime loans.

"As a result of its discriminatory and illegal mortgage lending practices, Wells Fargo transformed our cities' predominantly African-American and Latino neighborhoods into ground zero for subprime lending," Madigan said in a statement.

High foreclosure rates resulted from the illegal sales practices, the state's attorney general said.

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The Cause of the Deficit and its Importance

When George Bush took office at the beginning of 2001, the federal government was running a substantial budget surplus and projected rising surpluses "as far as the eye could see." Now, the United States is facing massive current deficits -- as a share of the economy, the largest since World War II -- and an increasingly dire and unsustainable outlook over the next 10 years and beyond.

How did we get into this fiscal mess? To quote a character in Ernest Hemingway's classic novel, "The Sun Also Rises," when asked by another how he lost his wealth, "Two ways. Gradually and then suddenly."

The gradual part was a series of policy actions adopted during the Bush administration. In 2001, the Congressional Budget Office projected that the 2008 budget would show a surplus equal to 4.5% of gross domestic product. The actual 2008 budget ran a deficit of 3.2% of GDP. Almost all of the reversal was the result of policy changes -- tax cuts and spending increases.

Then, in 2009, the bottom fell out.

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