Karl Heideck, a prominent litigation expert from Greater Philadelphia area, thinks that the discriminatory lending policies that the City of Philadelphia alleges Wells Fargo executed comes under red-lining. He explained red-lining is a practice many banks started following from the 1930s to delimit the neighborhoods they do not want to lend – like drawing a red-line to the areas to exclude people living there from loan services. However, if it is done considering the race or ethnicity of the borrower, it is against the Constitution. Interestingly, redline is not illegal when it is due to other reasons like the neighborhoods did not meet the specific standards such as frequent flood issue and more.
The City filed a lawsuit against the banking major stating it violated the 1968 Fair Housing Act by applying predatory lending procedures towards minority mortgage borrowers. However, Wells Fargo denied the allegations and said that it was following fair practices in its lending. The suit was filed in the District Court for the Eastern District on May 5, and it is considered to be another setback for the bank as it is already under the scanner for a scam of opening bogus accounts in customers’ names. Karl Heideck explains that the city filed the suit due to it identified the bank was selling riskier housing loans to the Hispanic and black borrowers. These loans were charging higher interest rates, though the borrowers were eligible for low-interest and lower-risk loans.
Karl Heideck is an attorney with greater expertise in compliance and risk management review along with litigation. He started his career with Conrad O’Brien as an Associate and presented the cases of both corporates and individuals in various complex litigation such as SEC receivership, government investigations, toxic tort defense, and more. Later, Heideck worked with Pepper Hamilton as Project Attorney and took the role of quality control specialist with detailed analysis.
He also collaborated with Hire Counsel as a contract attorney that included the review of files detailing banking litigation and complex securities fraud. Karl Heideck completed his Bachelor of Arts in English Literature and Language from Swarthmore College. He earned his J.D. from James E. Beasley School of Law.