The Consumer Financial Protection Bureau (CFPB) and the Department of Justice (DOJ) have imposed $35m fine on National City Bank, owned by PNC Financial Services Group, for charging higher prices on residential loans to African-American and Hipsanic borrowers.
According to the governing bodies, over 75,000 African-American and Latino customers of National City Bank paid more for their residential loans between 2002 and 2008.
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During that period, the bank made over one million mortgage loans through its retail channel and over 600,000 loans through independent brokers.
CFPB director Richard Cordray said borrowers should never have to pay more for a mortgage loan because of their race or national origin.
"Today’s enforcement action puts money back in the pockets of harmed consumers and makes clear that we will hold lenders accountable for the effects of their discriminatory practices," Cordray added.
DOJ Attorney General Eric Holder said this settlement will provide deserved relief to thousands of African-American and Hispanic borrowers who suffered discrimination at the hands of National City Bank.
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By GlobalData"As alleged, the bank charged borrowers higher rates not based on their creditworthiness, but based on their race and national origin. This alleged conduct resulted in increased loan prices for minority borrowers. This case marks the Justice Department’s latest step to protect Americans from discriminatory lending practices, and shows we will always fight to hold accountable those who take advantage of consumers for financial gain," Holder added.
