Bank of America to pay $335M in fair-lending case
Bank of America has agreed to pay $335 million to resolve allegations that its Countrywide unit engaged in a widespread pattern of discrimination against qualified African-American and Hispanic borrowers.
The settlement with the U.S. Justice Department was filed Tuesday with the Central District court of California and is subject to court approval. The DOJ says it's the largest settlement in history over residential fair lending practices.
"The department's action against Countrywide makes clear that we will not hesitate to hold financial institutions accountable, including one of the nation's largest, for lending discrimination," Attorney General Eric Holder said in a statement.
Charlotte, N.C.-based Bank of America Corp. bought the nation's largest subprime lender, Countrywide Financial Corp., in 2008.
"We reached this settlement to resolve issues about Countrywide's alleged historic practices that occurred before Bank of America acquired the company," company spokesman Dan Frahm told Bloomberg News. "We are committed to fair and equal treatment of all our customers, and will continue to focus on doing what's right for our customers, clients and communities. We discontinued Countrywide products and practices that were not in keeping with our commitment."
The settlement amount will be used to compensate victims of Countrywide's discriminatory mortgage loans from 2004 through 2007.