Block on Trump's Asylum Ban Upheld by Supreme Court
Government lawyers seem to be in a rush to wrap up high-profile cases before the new administration takes over. In December, Deutsche Bank settled a federal investigation into its mortgage securities, for $7.2 billion. Then came Volkswagen, laying out almost $15 billion in what might be the most expensive corporate scandal ever. Last week, Takata agreed to settle an investigation into its cover up of airbag defects for $1 billion, a relative steal. Credit Suisse followed, agreeing to pay $5.3 billion for violations involving mortgage-backed securities.
Today, JPMorgan Chase joined the ranks, agreeing to pay $55 million to settle a Justice Department lawsuit that accused it of discriminatory mortgage lending practices targeted at African-American and Hispanic homebuyers.
JPMorgan's Wholesale-Mortgage Practice and Housing, Lending Violations
JPMorgan engaged in discriminatory mortgage practices from 2006 to 2009, according to the lawsuit against it, by allowing its independent brokers to charge minority borrowers higher rates for mortgages than they did for white borrowers with the same credit. That resulted in an extra $968 in charges over a loan's first five years for Hispanic borrowers and $1,126 more for black ones, the suit alleges.
Those alleged violations occurred as part of the bank's wholesale-mortgage practice, through which JPMorgan used independent brokers to evaluate borrowers and offer loan terms. Chase allowed subcontracted brokers to change standard rates, introducing discretion that led to discrimination, as mortgage brokers began charging minorities more.
In failing to require brokers to explain their changes and failing to address discrimination, JPMorgan encouraged it to continue, according to the complaint, thus violating the Fair Housing Act and Equal Credit Opportunity Act, showing "reckless disregard" for the rights of borrowers.
A Settlement, but No Admission of Guilt
The DOJ's suit was filed and settled on the same day, this Wednesday, according to Reuters. The agreement's full details aren't available yet, but it appears that JPMorgan will make no admission of guilt as part of the settlement.
"We've agreed to settle these legacy allegations that relate to pricing set by independent brokers," according to JPMorgan spokeswoman Elizabeth Seymour. "We deny any wrongdoing and remain committed to providing equal access to credit."