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First United Bank Settles Lending Discrimination Lawsuit in Texas
The Justice Department announced that First United Bank, of Dimmitt, Texas, has agreed to settle a lawsuit alleging that it charged higher prices on unsecured consumer loans made to Hispanic borrowers in violation of the Equal Credit Opportunity Act (ECOA).
Under the settlement, First United Bank will pay a total of $140,000 to compensate hundreds of victims of discrimination, monitor its loans for potential disparities based on national origin and provide equal credit opportunity training to its employees. The bank will also maintain its revised pricing policies to ensure that the price charged for its loans is set in a non-discriminatory manner consistent with the requirements of ECOA.
The lawsuit originated from a referral by the Federal Deposit Insurance Corporation (FDIC) to the Civil Rights Division. First United Bank is a member of the FDIC. The Justice Department’s enforcement of fair lending laws is conducted by the Fair Lending Unit of the Housing and Civil Enforcement Section in the Civil Rights Division.
“The Civil Rights Division is committed to ensuring that lenders price all types of loans based on appropriate credit factors and not based on prohibited factors such as national origin,” said Acting Assistant Attorney General Vanita Gupta for the Justice Department’s Civil Rights Division. “We commend First United Bank for implementing a system of loan pricing that provides objective guidance to the bank’s employees.”
The settlement, which is subject to court approval, was filed in conjunction with the Justice Department’s complaint in the U.S. District Court for the Northern District of Texas. The complaint alleges that First United Bank charged higher prices on unsecured consumer loans made to Hispanic borrowers in violation of the Equal Credit Opportunity Act (ECOA).
“This district is committed to ensuring banks and other lending institutions do not discriminate against borrowers on the basis of national origin,” said Acting U.S. Attorney John Parker for the Northern District of Texas. “I join the Acting Assistant Attorney General in recognizing First United Bank’s cooperation in accomplishing this settlement that will compensate hundreds of victims of this discrimination.”
Key Facts
- State: Texas
- Category: Fraud & Financial Crimes
- Source: DOJ Press Release â†â€â€
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