According to multiple reports, JPMorgan Chase agreed to a $55 million settlement with the Department of Justice, which accused the bank’s brokers of charging higher interest rates to minority borrowers than white borrowers in the run-up and during the financial crisis.
Here are some of the details courtesy of the New York Times:
The proposed settlement, which was announced Wednesday, would conclude a federal inquiry that began nearly seven years ago into possible discriminatory mortgage practices by JPMorgan, the nation’s largest bank.
The discriminatory loans were originated from at least 2006 to late 2009, according to a complaint filed this month by Preet Bharara, the United States attorney for the Southern District of New York. Black and Hispanic borrowers were charged, on average, $1,000 more than comparable mortgages given to whites, the complaint said.
The mortgages were made by independent brokers and then funded by JPMorgan, a standard practice in the years before the 2008 financial crisis, when banks relied on third parties to bring them lucrative loans through what was known as a wholesale network.
According to USA Today, JPMorgan’s brokers allegedly overcharged at least 53,000 borrowers, causing “tens of millions of dollars in damages.”
The settlement isn’t finalized yet, so the U.S. Attorney’s office isn’t commenting on it, but JPMorgan did issue a statement about the settlement.
From USA Today:
“We’ve agreed to settle these legacy allegations that relate to pricing set by independent brokers,” the company said in a statement. “We deny any wrongdoing and remain committed to providing equal access to credit.”