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WASHINGTON -- Mortgage discrimination against black and Hispanic communities has led to a proposed $32.75 million settlement between Hudson City Savings Bank and the federal government.
The New Jersey-based lender located branches, chose mortgage brokers and marketed loans that discouraged borrowers in predominantly minority communities, the Consumer Financial Protection Bureau and Justice Department said Thursday.
Those specific practices show that Hudson City violated federal law by structuring its business to avoid providing credit based on race and national origin, said U.S. Attorney Paul J. Fishman of the District of New Jersey.
If the court overseeing the case approves the settlement, Hudson City would need to pay $25 million for a loan subsidy program to increase access to mortgages in black and Hispanic neighborhoods. It would also owe $2.25 million for community programs and outreach and $5.5 million in penalties.