Friday, December 23, 2011
Bank of America, owner of Countrywide Financial Corporation, has agreed to pay $335 million to settle discrimination complaints filed against its subsidiary.
Crafted by the U.S. Department of Justice, the settlement resolves allegations that Countrywide discriminated against African-American and Hispanic borrowers who sought loans from 2004 through 2008. At $335 million, the deal is the largest residential fair-lending settlement in history, according to federal prosecutors.
The bank agreed to the settlement without admitting any wrongdoing. It was accused of charging more than 200,000 blacks and Latinos higher fees and interest rates than white borrowers in both its retail and wholesale lending. The money will be used to compensate the discrimination victims.
As large as the settlement appears, it is worth noting that during the height of the financial crisis, Bank of America received at least $136 billion in federal loans and used part of the bailout to gain $1.5 billion in profits.
The settlement won’t be finalized until it is approved by the U.S. District Court for the Central District of California.
-Noel Brinkerhoff, David Wallechinsky
Justice Department Reaches $335 Million Settlement to Resolve Allegations of Lending Discrimination by Countrywide Financial Corporation (U.S. Department of Justice)
That $335 Million BofA Settlement: The Good, The Bad, And The Very Ugly (by Richard Eskow, Institute for America’s Future
United States v. Countrywide Financial Corporation (U.S. District Court, Central California)
Bank of America Wins Worst Bank Title; Credit Unions Customers Most Satisfied (by Noel Brinkerhoff, AllGov)
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