JPMorgan Chase will pay $55 million in a settlement over claims the bank giant charged thousands of African American and Hispanic borrowers higher interest rates on mortgages than white counterparts.
Federal officials say the bank charged Black and Hispanic borrowers, on average, $1,000 more than similar mortgages issued to whites. The mortgages were reportedly issued by third-party independent brokers, but then funded by JPMorgan. Such a practice was once common, but many banks have since said they will no longer rely on third-party agents to broker loans.
“We’ve agreed to settle these legacy allegations that relate to pricing set by independent brokers,” JPMorgan released in a statement. “We deny any wrongdoing and remain committed to providing equal access to credit.”
Federal officials have been investigating discriminatory claims surrounding the bank’s mortgage practices for nearly seven years. The loans in question were originated between 2006 to late 2009.
The settlement is still subject to a judge’s approval.
Other banks have faced similar charges over discrimination in mortgage originations in recent years. In 2012, Wells Fargo agreed to pay $175 million in a settlement over allegations that its independent brokers had discriminated against African American and Hispanic borrowers by charging higher fees.
Source: “JPMorgan to Pay $55 Million to Settle Mortgage Discrimination Complaint,” The New York Times (Jan. 18, 2017)