Cleveland-based PNC Financial Services Group has agreed to pay 35 million dollar to African-American and Hispanic homeowners to settle claims it hooked those borrowers into higher-cost loans.
M.L. Schultze of member station WKSU in Kent reports.
If approved by a federal judge, the deal among PNC, the Justice Department and Consumer Financial Protection Bureau will settle allegations that – from 2002 through 2008—National City Bank “engaged in a pattern or practice of discrimination” against more than 75,000 African-American and Hispanic borrowers.
PNC bought National City in 2009. Before that, the complaint says National City gave its loan officers and mortgage brokers discretion to charge borrowers higher rates and fees based not on credit worthiness, but on race and national origin. Minority borrowers ended up paying more than white borrowers.
U.S. Attorney Steve Dettelbach calls the practices “a troubling epilogue” to National City’s long history in Cleveland.
Both Dettelbach and PNC stressed the the settlement predated PNC’s acquisition of National City. In a statement, PNC says after the purchase, “we took steps to improve policies and procedures.”
The $35 million will go into an independently administered fund, and qualifying customers will be notified