National City Bank to pay $35 million for overcharged black and Hispanic borrowers on mortgages from 2002 through 2008.
National Bank is now PNC Financial Services Group.
Federal investors found that National City Bank systematically charged black and Hispanic borrowers more in interest and fees on mortgages from 2002 through 2008. This discrimination resulted in statistically significant higher pricing disparities based on race and national origin, and caused more than 41,000 Hispanic borrowers and more than 34,000 African-American borrowers to overpay, authorities said.
National City, now PNC Financial Services Group, will pay $35 million to make up for this discriminatory lending practice.
Think about the information you are giving this stranger: all your financial information, your children’s names, bank accounts and your social security number. You do this without the slightest guarantee that the information will be kept safe.
A two-year Consumer Financial Protection Bureau probe of Cleveland-based National City’s lending portfolio, revealed Monday, found that the bank charged around 0.1 percentage point more on loans to 75,000 black and Hispanic borrowers. That added an average of $160 per year to payments. Law suit: Consumer Financial Protection Bureau et al v. National City Bank, U.S. District Court, Western District of Pennsylvania.
“This settlement will provide deserved relief to thousands of African-American and Hispanic borrowers who suffered discrimination at the hands of National City Bank,” said Attorney General Eric Holder. “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.”
“With today’s settlement, thousands of African-American and Hispanic borrowers who were discriminated against by National City Bank will be entitled to compensation,” said Acting Assistant Attorney General Jocelyn Samuels for the Justice Department’s Civil Rights Division. “We look forward to further collaboration with the Bureau in protecting consumers from illegal and discriminatory lending practices.”
In just five years Consumer Financial Protection Bureau “CFPB” has successfully prosecuted banks, auto lenders, payday loan and title loan companies for their shameful acts, including larceny and discrimination.
I can only hope lenders will revise their business models to respect the rights of their borrowers.