Reports of the settlement first emerged last week, but today’s announcement makes it official. The settlement amount was first reported at around $55 million, but the actual amount is a slightly lower $53 million, according to a report.
According to the Justice Department, from at least 2006 to 2009, many of JPMorgan’s independent mortgage brokers – originating through its wholesale business – charged African American and Hispanic borrowers higher rates and fees than white borrowers in similar economic situations. The Justice Department alleged that at least 50,000 minority borrowers faced this discrimination.
According to HousingWire, JPMorgan has agreed to create a settlement fund of about $53 million in order to compensate those 50,000 borrowers.
“Today’s settlement will compensate thousands of African-American and Hispanic borrowers who paid higher rates and fees on Chase mortgages than similarly situated white borrowers,” US Attorney Preet Bharara said in a statement. “In the settlement announced today, Chase admits the government found that the bank’s wholesale lending brokers charged minority borrowers more than white borrowers in the same position. Such unequal treatment is not only unfair, but a violation of the Fair Housing Act.”
“We’ve agreed to settle these legacy allegations that relate to pricing set by independent brokers,” the bank said in a statement. “We deny any wrongdoing and remain committed to providing equal access to credit.”
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JPMorgan Chase has officially settled federal allegations that its brokers charged minority borrowers higher interest rates than white borrowers.