Banks, Loans | featured news

It is an open secret in the banking world: the interest rates for many mortgages and loans are based on a benchmark that is largely guesswork. The flaws in the rate-setting process, which is used to determine the pricing for trillions of dollars of financial products, have been exposed by the latest banking scandal. Regulators around the world are investigating whether big banks gamed the rates for their own benefit before and after the financial crisis.

Wells Fargo Bank will pay at least $175 million to settle accusations that it discriminated against African-American and Hispanic borrowers in violation of fair-lending laws, the Justice Department announced Thursday.

Across the country, banks and other lenders are still being stingy in providing credit to ordinary consumers. Only the most financially stable of Americans can secure mortgages. Small businesses are having trouble getting loans. Credit card access is restricted.

Wells Fargo's profit jumped 13 percent in the first three months of the year, thanks to strong mortgage lending and a drop in delinquent loans, the bank said Friday.

The nation’s banks and credit unions had their best year since 2006, as a slowly recovering economy led to modest loan growth and lower levels of nonperforming loans.

Lending numbers suggest that while the economy remains fragile, the confidence of consumers and businesses may be more resilient than experts had believed.