Hudson City Settles Discriminatory Lending Charges for About $33 Million -- 2nd Update
September 24 2015 - 12:36PM
Dow Jones News
By Lisa Beilfuss
Hudson City Bancorp Inc. will pay almost $33 million to resolve
claims that it engaged in discriminatory mortgage lending
practices, the latest example of how the government is increasingly
scrutinizing banks and other lenders for patterns of
discrimination.
The East Coast lender will spend about $27 million for loan
subsidy and outreach programs and pay a $5.5 million penalty under
a settlement with the Consumer Financial Protection Bureau and the
Department of Justice.
The agreement comes as the Federal Reserve prepares to rule on
M&T Bank Corp.'s long-stalled acquisition of the regional bank
amid concerns about M&T's anti-money-laundering process. A
decision is expected by Wednesday.
The agencies claims Hudson City Savings Bank, which operates
about 135 branches, provided unequal access to credit to
neighborhoods in New York, New Jersey, Connecticut and Pennsylvania
by avoiding placing branches, loan officers and marketing products
in communities that are mostly Black and Hispanic.
For its part, Hudson City said it decided to settle the matter
to avoid litigation with these agencies, though it disagrees with
the statistical analysis of loans used in the investigation.
The Department of Justice said the agreement represents the
largest residential mortgage redlining settlement in its
history.
The case against Hudson City is the latest in a string of
investigations into and settlements of discriminatory lending
practices.
Cincinnati-based Fifth Third Bank has also been under
investigation by the DoJ and CFPB; that case is focused on a
practice in which auto dealers can mark up the rates offered on
loans to consumers.
Last year, the city of Los Angeles brought charges against J.P.
Morgan Chase & Co. for discriminatory lending, and in 2013
regulators reached a $35 million settlement with Cleveland-based
PNC Financial Services Group, which allegedly charged higher
interest rates and fees on black and Hispanic borrowers.
Write to Lisa Beilfuss at lisa.beilfuss@wsj.com
(END) Dow Jones Newswires
September 24, 2015 13:21 ET (17:21 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
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