The U.S. Department of Housing and Urban Development (HUD) has accused Wells Fargo of engaging in discriminatory lending practices by implementing mortgage programs that favor minority applicants. The allegation was detailed in a letter sent Wednesday to Wells Fargo’s CEO, Charles Scharf, as part of an ongoing investigation into potential violations of the Fair Housing Act.

The letter, signed by HUD Assistant Secretary Craig W. Trainor, cites Wells Fargo for publicly promoting race-conscious policies, including offering lower-cost refinancing options to Black homeowners and establishing a $150 million credit initiative aimed at advancing racial equity in homeownership. These measures, according to HUD, amount to lending decisions based explicitly on race, which the agency contends contravene civil rights protections that prohibit discrimination based on race, religion, sex, or national origin.

HUD’s letter also noted that Wells Fargo had initially publicized these minority-focused programs through press releases and online announcements, though many such references have since been removed. The department indicated that the investigation could be expanded to involve the Department of Justice.

The inquiry occurs amid wider efforts by the Trump administration to challenge race-conscious policies in corporate and educational settings. HUD’s focus on Wells Fargo represents an extension of the administration’s scrutiny of programs designed to address historical racial disparities, including in homeownership, where Black and Hispanic families remain significantly less likely to own homes compared to white and Asian counterparts, according to data from the Pew Research Center.

In response to requests for comment, Wells Fargo declined to provide a statement. The letter highlights that these race-conscious lending programs emerged or grew more common during the Biden administration, although HUD asserts its enforcement responsibilities regardless of the current administration.

This investigation follows other actions by the Trump administration against diversity and inclusion initiatives considered to disadvantage white and Asian individuals. Similar critiques have been leveled at university admissions policies, notably at the University of California, Berkeley, which the administration recently accused of discriminating against certain demographic groups.

Historically, banks have largely avoided direct White House criticism over race-based programs; instead, recent focus has been on allegations of “debanking” — the practice of closing accounts of conservative clients — with Wells Fargo among institutions previously cited by regulators for account closures. Industry officials, however, deny that political views influence such banking decisions.

The HUD letter signals an increased regulatory emphasis on ensuring that efforts to promote racial equity comply with existing fair lending laws, underscoring the tension between initiatives aimed at reducing racial disparities and legal interpretations of nondiscrimination statutes.