Financial Watchdog Objects to Wachovia Acquistion; Payday Loan Lender Relationship Cited
By J.J. CameronPayday Loan Writer
No so fast!
That's the message Fair Finance Watch, a financial services watchdog, has given to Wachovia Corp. The issue at stake is the proposed $25.5 billion acquisition of Golden West Financial by the latter company.
In a 15-page challengefiled July 24 with the Federal Reserve Board in Washington, Fair Finance asks the Fed to hold public hearings on the merger's potential to raise prices ; along with what it says is Wachovia's continuing enabling of instant payday loan lenders and the disparities in Wachovia's 2005 mortgage data. The group requests that the Fed deny Wachovia's application to buy Golden West.
Reasons behind the objection: An analysis by Fair Finance Watch of Wachovia's 2005 mortgage data showed that African Americans and Latinos who borrowed from Wachovia and its affiliates were confined to higher-cost loans or denied loans far more frequently than white borrowers.
Moreover, the group isn't pleased Wachovia's continuing relationships with and financing of faxless payday loan lenders and pawnshops, despite bank policy statements to the contrary. A Wachovia spokeswoman would not comment specifically on any of the allegations in the Fair Finance Watch challenge.
The bank's prepared statement said:
"Wachovia has a long history of commitment to our community. We look forward to building on our legacy of community excellence and extending the reach of our community programs and products in Golden West Financial's markets."
But will this be possible if they continue to be in cahoots with pay day loan providers?
