In 2017, the U.S. Department of Justice Investigations Division launched a probe into whether some of the nation’s largest banks were involved in mortgage pricing discrimination. According to a press release from the DOJ, the investigation focused on “whether certain banks engaged in unlawful practices related to the pricing of certain residential mortgage loans.”
The probe began after complaints were filed that banks were unfairly pricing mortgages based on factors such as race, gender, and ethnicity. After the investigation began, it was discovered that several lenders, including Wells Fargo, Bank of America, JPMorgan Chase, and Citigroup, had allegedly engaged in the discriminatory practices.
The DOJ ultimately charged Wells Fargo with a violation of the Fair Housing Act after finding that the bank had charged African American and Hispanic borrowers higher interest rates, higher fees, and higher costs for different mortgage products than it charged to similarly situated white borrowers. Bank of America, JPMorgan Chase, and Citigroup also accepted settlements to resolve the DOJ’s allegations against them.
The settlements have resulted in penalties and orders for the banks to modify certain practices, undertake other measures to avoid any future discriminatory practices and provide remediation to affected borrowers. Regulators are continuing to monitor the banks’ compliance with the settlements and other actions taken by the banks to ensure they comply with all applicable laws.