On Thursday, the Justice Department announced SunTrust Banks Inc.’s mortgage-lending division would pay $21 million to settle charges that borrowers were charged higher fees based on their race or national origin between 2005 and 2009.
The settlement comes after a two-and-a-half-year investigation by the DOJ which included reviewing internal company documents and data on more than 850,000 residential mortgage loans SunTrust Mortgage originated between 2005 and 2009. The DOJ found SunTrust Mortgage’s regional retail offices and national network of mortgage brokers engaged in a pattern or practice of discrimination that increased loan prices for many black and Latino borrowers.
“Today’s settlement demonstrates that the Department of Justice takes seriously its responsibility to investigate mortgage lending practices during the mortgage boom years and, when the evidence shows the law was broken, to obtain compensation for victims of illegal conduct,” Thomas E. Perez, assistant attorney general for the Civil Rights Division, said in a statement. “We will, however, work constructively with responsible lenders like SunTrust Mortgage that are willing to take the necessary steps to ensure equal credit opportunity for all borrowers. We commend SunTrust Mortgage for taking action to implement strong fair lending policies even before they knew the full results of our investigation.”
“Racial and ethnic bias have no place in the lending market,” said Neil H. MacBride, U.S. Attorney for the Eastern District of Virginia. “We are pleased that SunTrust Mortgage is taking steps to compensate the victims and to ensure fair and equal access to credit in the future.”
The DOJ settlement is still subject to court approval, documents were filed Thursday in federal court in Richmond, Va., where SunTrust Mortgage is headquartered.