Houston v. Wells Fargo
- Clarke
- 7:24-cv-07637
- U.S. District Court · Southern District of New York
- 10
In Houston v. Wells Fargo, Judge Clarke dismissed the discrimination claim without prejudice, allowed a notice claim to continue, and denied Houston’s summary-judgment motion without prejudice.
Leonard W. Houston may continue pursuing his ECOA notification claim and may amend any discrimination claim, while Wells Fargo must respond to an amended complaint if one is filed. Houston may renew his summary-judgment motion, subject to the court’s stated limits.
What happened
Leonard W. Houston, representing himself, sued Wells Fargo under the Equal Credit Opportunity Act after Wells Fargo denied his request for mortgage assistance and, he said, failed to explain why. Wells Fargo sent letters saying he did not qualify for payment assistance but could pursue a short sale.
The court ruled that Houston had not alleged facts showing discrimination based on a protected characteristic. But the court found that his complaint plausibly alleged that Wells Fargo failed to provide the reasons required when it denied his request for assistance. That claim remains in the case.
Judge Jessica G. L. Clarke granted Wells Fargo’s motion to dismiss in part and denied it in part. She denied Houston’s motion for summary judgment without prejudice because he did not follow required filing rules, discovery had not occurred, and Wells Fargo had not addressed the notification claim. Houston may amend any discrimination claim by June 27, 2025.
The detailed version
- Houston v. Wells Fargo · No. 7:24-cv-07637
- Clarke
- June 4, 2025
Background
Leonard W. Houston, proceeding without a lawyer, sued Wells Fargo under the Equal Credit Opportunity Act (ECOA). He alleged that Wells Fargo took an adverse action by denying his request for mortgage assistance without stating the specific reasons for the decision.
The dispute concerned a 2004 mortgage. Wells Fargo currently serviced the mortgage. In July 2024, Wells Fargo sent Houston a letter concerning missed payments and his request for payment assistance. The letter said he had been approved for a short sale, which would allow him to sell the property for less than the full amount owed, but did not provide the outcome he had requested. In August 2024, Wells Fargo again said Houston did not meet the requirements for payment assistance and referred him to a short sale.
Wells Fargo moved to dismiss the complaint under Federal Rule of Civil Procedure 12(b)(6), which tests whether a complaint alleges enough facts to state a legally plausible claim. Houston moved for summary judgment, which asks the court to rule because the material facts are not genuinely disputed.
ECOA Discrimination Claim
The ECOA prohibits creditors from discriminating in credit transactions based on characteristics such as race, color, religion, national origin, sex, marital status, or age. The court held that Houston’s complaint did not allege facts suggesting that Wells Fargo treated him adversely because of a protected characteristic. The complaint instead focused on Wells Fargo’s failure to explain why it denied his request for assistance.
The court therefore dismissed without prejudice any ECOA discrimination claim Houston intended to assert. The court permitted Houston to amend his complaint if he had facts supporting such a claim.
ECOA Notification Claim
The ECOA also requires a creditor to provide an applicant with a statement of reasons after taking adverse action, or to provide written notice explaining the applicant’s right to obtain those reasons and identifying the person or office from which they may be obtained.
The court concluded that Houston’s complaint plausibly alleged that Wells Fargo violated this notification requirement. The court observed that the Wells Fargo letters did not explicitly state reasons, or anything similar to reasons, for denying the requested payment assistance. Because Wells Fargo’s motion to dismiss addressed the complaint as asserting only discrimination, the court denied the motion as to the notification claim. The court expressly took no position at that time on whether Wells Fargo satisfied the notification requirement in some other way.
Summary Judgment Motion
The court denied Houston’s motion for summary judgment without prejudice. Houston had not followed the court’s Individual Rules and Practices or the Local Rules, including requirements to confer with Wells Fargo and submit a joint statement of undisputed facts. The motion was also filed before discovery and before Wells Fargo answered the complaint. The court found that further evidence could reveal factual disputes concerning the notification claim.
Disposition
Wells Fargo’s motion to dismiss was granted in part and denied in part. Any ECOA discrimination claim was dismissed without prejudice, while the ECOA notification claim was not dismissed. Houston’s motion for summary judgment was denied without prejudice. Houston was permitted to amend any ECOA discrimination claim by June 27, 2025, and Wells Fargo was required to respond by July 11, 2025.
Read the full 10-page opinion on CourtListener, the free public archive maintained by the Free Law Project.