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News Wrap: Wells Fargo Settles on Minority Lending Scam

July 12, 2012 at 12:00 AM EST
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HARI SREENIVASAN: Wells Fargo will pay at least $175 million to settle allegations of racially biased mortgage lending. The Justice Department announcement today involves claims from 2004 to 2009. During that time, Wells Fargo allegedly charged higher loan rates for minority borrowers than for whites with similar credit histories.

Deputy Attorney General James Cole said 34,000 people overpaid for their loans.

JAMES COLE, Deputy U.S. Attorney General: With today’s settlement, the federal government will ensure that African-American and Hispanic borrowers who are discriminated against will be entitled to compensation and borrowers and communities hit hard by this housing crisis will have the opportunity to access homeownership.

HARI SREENIVASAN: Wells Fargo is now the nation’s largest originator of home mortgages. Under the settlement, it denied any wrongdoing, but said it wanted to avoid drawn-out litigation. The settlement is the second largest of its kind ever.

Wall Street struggled again today, amid fears that global economic weakness will hurt U.S. corporate earnings. The Dow Jones industrial average lost 31 points to close at 12573. The Nasdaq fell 21 points to close at 2866.

Also today, mortgage giant Freddie Mac report — reported that mortgage interest rates hit another record low, averaging a little over 3.5 percent for a 30 year fixed-rate loan.

Reports of a new massacre in Syria surfaced late today. Opposition sources reported 100 to 200 people were killed in Hama province. They said helicopter and tanks attacked first and then militias killed the survivors. Elsewhere, amateur video showed a new round of heavy shelling in Homs. The city has repeatedly been attacked in recent months. And army tanks and mortars shelled part of Damascus for the first time since the uprising began 16 months ago.

Thousands of Protestants marched across Northern Ireland today, triggering street battles in Belfast. The day-long marches commemorate a 17th century military victory over Catholic forces. And for the fourth straight year, Catholic militants fought with riot police after the Protestant parade had passed. The street battles lasted for three hours.

The British government confirmed today that it is mobilizing up to 3,500 additional troops for security at the Summer Olympics in London. A private firm, G4S, had been paid $438 million to recruit guards for 100 Olympic venues. But the firm now admits it may fall well short.

We have a report from Keir Simmons of Independent Television News.

KEIR SIMMONS: If the aim was to avoid the Games looking like a military operation, there’s not much hope of that now. In places on the Olympic Park today, soldiers were as much in evidence as G4S staff, and on the company’s Facebook page, continuing complaints from G4S recruits.

One former employee sacked for speaking out says the system has been in chaos.

SARAH HUBBLE, Former G4S Employee: I knew it was going to happen. And when I was there, they were struggling, and didn’t have enough staff, weren’t vetting the staff properly. It was a total rush job from the beginning. So, absolutely no shock.

KEIR SIMMONS: It was when Olympic venues went into lockdown during last week that it emerged G4S staff were not turning up as planned. A computer failure is said to have caused the problem.

But ITV News has seen an e-mail from the Home Office to G4S written months ago raising concern that 49 percent of recruits were not completing security training and an internal document from April which says “Overall attendance this week appears to be 60 percent of planned capacity,” and even that “it’s not clear G4S is really targeting the right people to be X-ray operators beyond basic competency tests.”

It warns, “We will very soon start to see big shortfalls against planned numbers.” And it reveals that even in April officials were “viewing with trepidation the inevitable last-minute nature of the mass throughput that will be the consequence.”

I understand that G4S was reassuring the Home Office that it would deliver right up until yesterday. Finally, officials concluded that they simply couldn’t rely on that. G4S say their training regime was put under close scrutiny by the Home Office and officials clearly were asking some searching questions.

HARI SREENIVASAN: All told, 17,000 British troops will help with Olympic security when the Games begin July 27. That’s nearly twice the number of troops that Britain has deployed in Afghanistan.

One of rock ‘n’ roll’s most celebrated bands, the Rolling Stones, marked 50 years in the business today. Mick Jagger, Keith Richards and several others first performed as the Stones in London on this day in 1962. The band took its name from a song by bluesman Muddy Waters. The lineup has changed over the years, and most are now in their ’60s and ’70s. But Richards says they’re rehearsing for new shows.