Fifth Third Bancorp to Settle Discriminatory Lending Claims
September 28 2015 - 3:33PM
Dow Jones News
By Maria Armental
Fifth Third Bancorp agreed to pay $21.5 million to settle
allegations it discriminated against minorities, the latest case in
a federal crackdown against lending discrimination.
It follows a case federal officials reached last week with
Hudson City Bancorp Inc. to resolve allegations that the New Jersey
based lender intentionally withheld mortgages from minorities, a
practice known as "redlining."
At Fifth Third, the Department of Justice and Consumer Financial
Protection Bureau said the regional bank charged higher dealer
markups to minority car buyers, regardless of their
creditworthiness. As a result, the authorities said thousands of
minority borrowers were charged, on average, more than $200 more
for their auto loans between January 2010 and September 2015.
Separately, federal authorities said Cincinnati-based Fifth
Third Bank's telemarketers deceptively sold so-called debt
protection coverage to credit card customers, misrepresenting costs
and fees among other alleged violations.
Under the terms of the agreement, the regional bank, which
didn't admit wrongdoing, will pay a $500,000 civil penalty, along
with $3 million to some 24,500 affected credit card customers and
$18 million to auto loan customers.
Fifth Third Bank has about 1,300 branches in 12 states,
concentrated primarily in the Midwest and Southeast.
Shares slid 2.4% to $18.67 in afternoon trading, down 8.4% for
the year.
Write to Maria Armental at maria.armental@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
September 28, 2015 15:18 ET (19:18 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
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