Bank of America's Countrywide Financial subsidiary has agreed to pay $335m to resolve the US Department of Justice (DOJ) allegations of lending discrimination.
According to the DOJ’s complaint, Countrywide discriminated by charging over 200,000 African-American and Hispanic borrowers higher fees and interest rates than non-Hispanic white borrowers in both its retail and wholesale lending.
The US also alleges that Countrywide discriminated by steering thousands of African-American and Hispanic borrowers into subprime mortgages when non-Hispanic white borrowers with similar credit profiles received prime loans.
The settlement amount will be used to compensate victims of Countrywide’s discriminatory mortgage loans from 2004 through 2007.
Attorney General Eric Holder said that the department’s action against Countrywide makes clear that they will not hesitate to hold financial institutions accountable, including one of the nation’s largest, for lending discrimination. These institutions should make judgments based on applicants’ creditworthiness, not on the color of their skin.
Bank of America acquired Countrywide Financial in 2008.