JPMorgan Chase & Co. said Wednesday that it has agreed to settle a federal lawsuit accusing the bank of discriminating against minority borrowers for years by charging them about $1,000 more for a mortgage than white customers.
The case was settled for $55 million, according to a person familiar with the settlement.
Between 2006 and 2009, JPMorgan charged at least 53,000 black and Latino borrowers more than white borrowers with the same credit and risk profile, according to the lawsuit filed Wednesday by U.S. Atty. Preet Bharara in Manhattan. The suit says black borrowers were charged an average of about $1,126 more for a $191,100 mortgage loan, while Latino customers were charged about $968 more on an average loan of about $236,800.
These borrowers, the lawsuit says, suffered "tens of millions of dollars in damages."
In a statement, JPMorgan denied the allegations, saying: "We've agreed to settle these legacy allegations that relate to pricing set by independent brokers. We deny any wrongdoing and remain committed to providing equal access to credit."
For years, New York-based JPMorgan — which is the largest bank in the country by assets — used a network of mortgage brokers throughout the country, according to the lawsuit. Those brokers were given leeway to charge customers higher interest rates or fees, which could help boost the brokers' compensation.
According to federal law enforcement, JPMorgan should have known that minority borrowers were routinely charged more than their white counterparts through that "wholesale" lending program. JPMorgan's pattern "of discrimination has been intentional and willful, and has been implemented with reckless disregard of the rights of African-American and Hispanic borrowers," the lawsuit says.
Merle writes for the Washington Post.
8:45 a.m.: This article was updated with details from the lawsuit and from JPMorgan's statement.