Travis Smiley’s Relationship with Wells Fargo Stirs Controversy

By Ruth Ferguson
NDG Editor

A lawsuit filed in July by Illinois Attorney General, Lisa Madigan, alleging Wells Fargo & Co., lured African Americans to use subprime loans with high interest rates to purchase their homes, is stirring criticism for Tavis Smiley and his relationship with the banking group.

The bait to lure African Americans allegedly included a series of Wealth Building seminars held around the country featuring Tavis Smiley, popular best-selling author and PBS talk show host. Smiley has acknowledged that Wells Fargo sponsored his State of the Black Union (SOBU) event and his show on Radio Public International, in exchange for him speaking at these seminars. But he also said it was a package deal, and his role in the seminars was about financial literacy and wealth building.

The Wealth Building seminars were held in minority communities in eight cities across the country, including Dallas. During his appearances, Smiley discussed the importance of building assets and wealth. Citing the situation in New Orleans after Hurricane Katrina, Smiley reportedly said those who had means were able to leave New Orleans, while those with nothing had to stay behind.

The Illinois lawsuit also states, “According to a former Wells Fargo Home Mortgage employee, one of these ‘Wealth Building’ seminars held in Maryland was planned for an audience that would be virtually all African America.”

Wells Fargo Home Mortgage employees avoided the use of the term “subprime” mortgages; instead the loans were referred to as “alternative lending.”

White employees were not allowed to speak at the seminars, according to the lawsuit, and only Black employees made presentations. The seminars were reportedly well attended, with some drawing standing room only crowds.

A June 6, 2009, article in the New York Times reported, “in a recent analysis of mortgage lending in New York City, it was found that black households making more than $68,000 a year were nearly five times as likely to hold high-interest subprime mortgages as whites of similar or even lower incomes. (The disparity was greater for Wells Fargo borrowers, as 2 percent of whites in that income group hold subprime loans compared to 16.1 percent of blacks.)”

In the lawsuit on this matter filed by the City of Baltimore, affidavits from a loan officer stated employees referred to blacks as “mud people” and to subprime lending as “ghetto loans.”

The Washington Independent – a web-only project of the Center for Independent Media – has reported extensively on Smiley’s relationship with Wells Fargo.

As their story began to pick up traction in the Black Blogsphere, Richard Prince reported September 18 in his Maynard Institute’s Journal-isms column that Smiley had declared that “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.”

A recent posting on Smiley’s Website TavisTalks.com, states that he severed his relationship with Wells Fargo when the charges first surfaced at the beginning of this year, and suggestions it was done only recently are false.

Whether right or wrong, these latest allegations will likely add additional strain to Smiley’s relationship with the African-American community, many of who felt Smiley unfairly criticized then candidate Barack Obama for not attending the SOBU in 2008.

Smiley’s current book, Accountable: Making America as Good as Its Promise features a montage photo of President Obama.

Note: On Friday, September 25, Wells Fargo is planning to present a check for $100,000 to the Builders of Hope CDC. The Builders of Hope plan to use the contribution to restore foreclosed homes, create jobs and revitalize West Dallas neighborhoods. The organization is the only Dallas recipient of the annual Priority Markets program. The program is described as a nationwide Wells Fargo effort to help communities address the needs of local affordable housing.