A settlement with Capital One Financial Corp. brings to three the number of recent lending discrimination settlements reached with the U.S. Department of Justice.
A complaint was filed by the Justice Department in U.S. District Court for the Eastern District of Virginia against Chevy Chase Bank, F.S.B.
The lawsuit followed a referral in 2010 from the Office of the Comptroller of the Currency to the Justice Department’s Civil Rights Division.
The bank, which was acquired by Capital One, N.A., in 2009, is accused of engaging in a pattern or practice of discrimination against qualified black and Hispanic borrowers applying for home loans.
The alleged discrimination occurred from 2006 through 2009 in violation of the Fair Housing Act and the Equal Credit Opportunity Act
Capital One, itself, is not accused of discriminatory practices.
The settlement will cost Capital One $2.85 million. The proceeds will be distributed to around 3,100 black and Hispanic victim borrowers.
Last week, the Justice Department announced a $3 million settlement with Plaza Home Mortgage Inc. and another $0.7 million agreement with Southport Bank of Kenosha, Wis. Both of those settlements involved alleged higher pricing charged by mortgage broker clients of the two companies’ wholesale lending divisions.