On March 30, 2000, the United States Department of Justice filed a lawsuit in the U.S. District Court for the Eastern District of New York against a bank, in coordination with the United States Department of Housing and Urban Development and the Federal Trade Commission, alleging that it engaged ...
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On March 30, 2000, the United States Department of Justice filed a lawsuit in the U.S. District Court for the Eastern District of New York against a bank, in coordination with the United States Department of Housing and Urban Development and the Federal Trade Commission, alleging that it engaged in discriminatory lending practices.
The plaintiffs alleged that as a result of the defendant's discriminatory policies and practices, African-American female borrowers were charged higher mortgage broker fees than similarly situated white male borrowers. The plaintiffs also alleged that the defendant provided financial incentives to mortgage brokers to steer loan applicants to Delta and that the defendant approved loans without regard to the borrower's ability to repay.
The plaintiff filed a proposed consent order on April 10, 2000 that was signed by the court (Judge Sifton). Under the settlement agreement, the Defendant-bank is prohibited from lending engaging in any lending practices based on sex, race, or color. In addition, Delta has agreed to create a $7,250,000 remediation fund as well as an amelioration fund consisting of 525,000 unregistered shares of common stock to compensate borrowers impacted by the Defendant-bank's previous discriminatory measures.
This case was the first case for DOJ to litigate with combined allegations of fair lending and consumer protection.
Megan Richardson - 04/03/2014
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