BofA Settles Countrywide Discrimination Case For $335 Million
Add another costly settlement to Bank of America's multi-billion dollar tally of woes tied to the 2008 acquisition of mortgage giant Countrywide. The U.S. Justice Department announced Wednesday the Charlotte-based bank will pay $335 million to settle allegations of discriminatory lending. During the heyday of the housing boom, the mere color of your skin may well have affected the rate you got on a mortgage. "Our research shows that among borrowers with strong credit scores, African American households were more than three-times as likely to be pushed into one of these high-cost subprime loans than were white households," says Mike Calhoun, head of the Center for Responsible Lending. The Justice Department says Countrywide Financial did just that - overcharging more than 200,000 African-American and Hispanic borrowers between 2004 and 2008. "Such conduct undercuts the notion of a level playing field for all consumers," said Attorney General Eric Holder at a press conference announcing the settlement in which Bank of America will pay $335 million to compensate those Countrywide borrowers. "Under this administration, these harmful and discriminatory practices simply will not be tolerated," said Holder. A Bank of America spokesman is quick to emphasize the alleged discrimination happened before the company acquired Countrywide and adds Bank of America is committed to "fair and equal treatment" of all its customers. But it's Bank of America left paying the price for Countrywide's alleged sins, totaling more than $30 billion in lawsuits and settlements to date.