Saturday, June 13, 2015

Bankster Agrees To Cough Up $9M Plus Administrator's Costs To Resolve Allegations That It Soaked Thousands Of Blacks, Hispanics For Higher Fees On Home Mortgages Based, Not On Borrower Risk, But On Race/Nat'l Origin

From the U.S. Department of Justice (Washington, D.C.):
  • The Justice Department and Consumer Financial Protection Bureau (Bureau) filed a consent order [] to resolve allegations that Provident Funding Associates (Provident) engaged in a pattern or practice of discrimination that increased loan prices for African-American and Hispanic borrowers who obtained residential mortgages between 2006 and 2011 from Provident’s nationwide network of mortgage brokers.

    The settlement, which is subject to court approval, was filed in conjunction with the agencies’ complaint in the U.S. District Court for the Northern District of California. The complaint alleges that Provident violated the Fair Housing Act and Equal Credit Opportunity Act (ECOA) by charging thousands of African-American and Hispanic borrowers higher fees on mortgage loans not based on borrower risk, but because of their race or national origin. Provident cooperated fully with the agencies’ investigation into its lending practices and agreed to settle this matter without contested litigation.

    ***

    The lawsuit originated from a 2011 referral by the Federal Trade Commission (FTC) to the Justice Department’s Civil Rights Division. In 2012, the Bureau joined the Justice Department’s investigation.

    Under the terms of the proposed settlement, Provident will pay $9 million into a fund for the benefit of victims of its alleged mortgage lending discrimination. The proposed settlement provides for an independent administrator to contact and disburse payments to borrowers whom the agencies identify as victims of Provident’s discrimination, at no cost to the borrowers. Provident will pay all costs and expenses of the administrator. Borrowers who are eligible for compensation will be contacted by the administrator. The department will make a public announcement and post contact information on its website once the administrator begins contacting victims.
For the press release, see Justice Department and Consumer Financial Protection Bureau Reach Settlement with Provident Funding Associates to Resolve Allegations of Mortgage Lending Discrimination (Settlement Provides $9 Million in Compensation to African-American and Hispanic Borrowers).

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