JPMorgan Chase Settles Mortgage Discrimination Lawsuit for $55M

Just hours after a federal lawsuit was filed on Wednesday, JP Morgan Chase announced that it would pay $55 million to settle claims that its contracted independent brokers discriminated against minority home buyers by charging them higher mortgage rates.

In a statement, JPMorgan denied the mortgage discrimination allegations, saying “We’ve agreed to settle these legacy allegations that relate to pricing set by independent brokers. We deny any wrongdoing and remain committed to providing equal access to credit.”

Under the terms of the $55 million settlement, funds will go toward compensating minority borrowers who the government says were cheated by JPMorgan Chase’s alleged mortgage discrimination practices.

“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,” U.S. attorney for the Southern District of New York Preet Bharara stated. “Such unequal treatment is not only unfair, but a violation of the Fair Housing Act.”

On Wednesday, Bharara filed the civil rights lawsuit against the nation’s largest bank alleging that JPMorgan Chase engaged in discriminatory mortgage practices from 2006 through 2009.

According to the complaint, during this time period, JPMorgan Chase charged at least 50,000 African-American and Latino borrowers more than white borrowers with the same credit and risk profile.

The alleged mortgage discrimination involved so-called wholesale loans that were made through mortgage brokers the bank used to help originate loans, the complaint said. Chase purportedly allowed independent brokers to change rates charged for home loans from those initially set based on objective credit-related factors, the complaint said.

While the home loans in question were originated by independent mortgage brokers who were not employed by the bank, according to the government, JPMorgan Chase should have known that minority borrowers were routinely charged more than their white counterparts through that “wholesale” lending program.

JPMorgan’s pattern “of discrimination has been intentional and willful, and has been implemented with reckless disregard of the rights of African-American and Hispanic borrowers,” the lawsuit says.

These borrowers, the lawsuit goes on to say, suffered “tens of millions of dollars in damages.”

According to USA Today, the mortgage discrimination lawsuit was not the only legal action initiated against JPMorgan Chase by the government on Wednesday. The Department of Labor also filed a lawsuit against the bank that same day, accusing the bank of engaging in discriminatory practices against female employees.

Specifically, the DOL charges that JPMorgan Chase systematically pays women employees less than their male counterparts.

JPMorgan responded to the DOL’s complaint, stating that it is “committed to diversity in the workplace and looks forward to putting the case before a ‘neutral decision maker’.”

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The U.S. is represented by U.S. Attorney for the Southern District of New York Preet Bharara and Jean-David Barnea and David J. Kennedy of his office, as well as Vanita Gupta, the principal deputy assistant attorney general of the U.S. Department Justice Civil Rights Division, and Sameena Shina Majeed, the chief of the Justice Department’s Housing and Civil Enforcement Section.

The JPMorgan Chase Mortgage Discrimination Lawsuit is U.S. v. JPMorgan Chase Bank NA, Case No. 1:17-cv-00347, in the U.S. District Court for the Southern District of New York.