A federal judge ruled recently against Wells Fargo’s request to dismiss a suit charging it with racially motivated predatory lending. The case is being brought against Wells Fargo by the city of Baltimore which claims the bank was practicing “reverse red-lining.” The effect of “reverse red-lining” was to steer minority borrowers, many of them women, into higher cost sub-prime loans, when they qualified for standard loans.

Judge Benson Legg, presiding over the case, said according to Reuters, that Baltimore’s allegations ‘are sufficiently plausible and grounded in fact’ to allow the case to proceed.

Key to the judge’s decision was the testimony of two former Wells Fargo employees, Elizabeth Jacobson and Tony Paschal, who alleged that the bank had a special focus on the African American market. The bank made 65 percent of its loans in Baltimore to African Americans.

Congress held a hearing in June chaired by Rep. Carolyn Maloney, D-New York, looking into the lending practices of a number of banks, including, Citigroup, Bank of America and Chase.

The Supreme Court, in an important decision last week, boosted such efforts by ruling that states could examine the practices of national banks.

Regional banks, according to NPR, are vigorously opposing similar efforts by the Obama administration to establish a federal agency to oversee consumer lending. North Jersey Community Bank is lobbying New Jersey members of Congress against this effort. Its CEO, Frank Sorrentino, told NPR, “There are mortgage products out there that serve different purposes for different people. Not all interest-only products are bad. Not all ARM mortgages are bad.”

Adjustable rate mortgages (ARMs) across the country were disproportionately given to Black and Latino borrowers, helping trigger the recession.

It is expected that because the Well Fargo case focuses on the bank’s overall business practices as opposed to individual claims, important details will come to light.

Discovery is now proceeding in the Baltimore suit.