The revelations could resonate in Iowa, where two groups have made similar accusations against the company.

Elizabeth Jacobson, who worked as a subprime loan originator for Wells Fargo in Baltimore from 1998 to 2007, said her former company would encourage subprime loan officers to go into the city and target African American churches.

….to get a relationship going with the minister or the reverend at the church and try to get that person to schedule some sort of meeting. They would call it a “wealth-building seminar” to get the parishioners of the church to attend. And any loan that was funded by Wells Fargo, whether a purchase or a refinance, $350 would then be donated to the church. And so, that was the incentive for the church to want to have these seminars there.

But what would happen is the only loan officers that would attend these seminars were generally the subprime loan officers. And on these conference calls, at one point, somebody made a joke who happened to be a white loan officer and said, “Well, will I be able to go to these seminars?” And they were told right there on the conference call, unless you were of color, you could not attend these conferences, these wealth-building conferences. So it seemed me—Wells Fargo didn’t come right out and say this; this is just what I saw—is that they wanted the African American Wells Fargo loan officers to sell loans to the African American community.

Anyone who received a loan from Wells Fargo during this period could ask that the company donate $350 to a nonprofit of the borrowers choice.

“But the way that it was sold to these churches was, well, that money then will go back to your church. Have the parishioner decide, as the church is a nonprofit, that they want that $350 to go right back to that church,” Jacobson said.

In June, Jacobson filed a sworn affidavit with a federal court in support of the City of Baltimore’s lawsuit against Wells Fargo for pushing high-interest, subprime loans onto African Americans in Baltimore and the Maryland suburbs.

In addition to the targeting of African American communities, Jacobson said there was a push to drive up the company’s subprime loan division while telling the media the company was trying to avoid the risky loans.

I just started to see, well, wait a minute, you know, we’re putting — we’re setting people up for failure, basically. And what really — the point that really made my decision that I was going to leave the company was third quarter of ’07. Wells Fargo was actually the number one subprime lender in the country. So, internally, we’re getting all these emails and all this information about “great job, we achieved our goal, we’re number one subprime lender in the country.”

And I happened to see a news report with the CFO of Wells Fargo, and he was questioned about the subprime division and denied at that point that Wells Fargo even had a subprime division. So here he is, the chief financial officer, where the subprime loans were supposed to be paying for the fixed costs of the company, and he’s denying that Wells Fargo even did subprime loans. That was just the final straw of total disillusionment, and then I put my resignation in.

Loan officers would make “three to four times as much in commission if you put somebody into a subprime loan,” she said.

Two watchdog groups have compiled data showing a similar pattern of racial discrimination in Iowa. Their numbers show that minority homeowners in Des Moines were three times as likely to receive a high cost subprime loan as their white counterparts.

So far, no legal action has been taken in Iowa.

Here is Jacobson’s full interview, via Democracy Now.

Des Moines-based Iowa Citizens for Community Improvement and Chicago-based National People’s Action have compiled data showing 46 percent of African-American and 35 percent of Latino homeowners in the Des Moines area that received a mortgage from Wells Fargo were given a high-cost, subprime loan. Only 20 percent of white borrowers were given these loans.

When only low- or moderate-income borrowers are factored in, African-American and Latino homeowners in Des Moines were four times as likely to receive a subprime loan as their white counterparts.

Similar numbers in other parts of the country have sparked legal action against Wells Fargo, which is not only the nation’s largest mortgage lender but is also the largest employer in Central Iowa, with more than 11,000 full-time employees in 2008.

So far, no legal action has been taken in Iowa.

The city of Baltimore sued the company last year claiming it engaged in a pattern of predatory lending practices in the city’s poorest neighborhoods, specifically targeting African-American neighborhoods for high-risk and unfairly priced loans.

The practice, known as reverse redlining, is prohibited under the federal Fair Housing Act.

Earlier this month, Illinois Attorney General Lisa Madigan filed a similar lawsuit against the company, claiming Wells Fargo specifically targeted heavily populated African American and Latino areas for high-cost loans, while whites with similar income levels received lower-cost loans.

Madigan’s lawsuit contends that Wells Fargo’s practices “transformed African-American and Latino neighborhoods into ground zero for subprime lending.”

The suit also claims some borrowers were led to believe that they were getting loans from Wells Fargo Home Mortgage, which is principally a prime lender, when in fact their loans were from a subprime unit, Wells Fargo Financial. Both of those entities are headquartered in the Des Moines metropolitan area.

Bob Brammer, a spokesman for Iowa Attorney General Tom Miller, said his office is monitoring Illinois’ lawsuit but has not taken any action so far on this particular issue.

Miller is no stranger to the subprime mortgage crisis. He was one of the main attorneys general in a lawsuit last year accusing Countrywide Financial Corp. of unfair and deceptive tactics in its loan-origination and servicing activities — and that borrowers often were put in structurally unfair and unaffordable loans.

The company eventually agreed to provide loan modifications to up to 397,000 borrowers nationwide.

Miller’s office also helped establish the “Iowa Mortgage Help” initiative, which set up a hotline and Web site to offer free counseling for homeowners in financial distress.

In a statement to the Iowa Independent, Wells Fargo said the allegations are a complete mischaracterization of the company’s lending practices.

“We have a long-standing commitment to fair and responsible lending,” the company said. “The policies, systems and controls we have in place ensure race is not a factor in the pricing or products we offer. Our controls are designed to ensure our lending is fair, responsible and nondiscriminatory. Our pricing is competitive and reflects the risk in the transaction including credit, loan type, loan-to-value ratio and property type. Prime pricing is made available to all borrowers who qualify.”

The move creates the nation’s third coast-to-coast bank, allowing Wells Fargo to go head-to-head with Bank of America and J.P. Morgan Chase,  which bought failed Washington Mutual last week. Wells Fargo will now operate more than 10,000 locations and employ around 280,000 people nationwide.

According to The Des Moines Register, Wells Fargo’s impact on Iowa’s economy is huge. For every Wells Fargo job in Iowa, about two other jobs are sustained elsewhere in the state, meaning 25,800 jobs exist in Iowa as a result of the company.

Wells Fargo donated about $5 million in 2006 to Iowa charitable organizations, and it pays about $13.4 million in property taxes on its 4 million square feet of office space in the Des Moines metro area.