NEW YORK, Jan. 18 (UPI) — The federal government is accusing JPMorgan Chase & Co. of discriminating against “thousands” of minority borrowers by charging them higher rates and fees on home mortgage loans between 2006 and late 2009.
The Justice Department filed a lawsuit Wednesday in a Manhattan federal court, accusing the nationwide bank of violating U.S. Fair Housing Act and the Equal Credit Opportunity Act from 2006-09.
The government says at least 53,000 black and Hispanic borrowers were charged “tens of millions of dollars” more than white borrowers “with the same credit and risk profile.” The average additional amount was $1,126 on a loan of $191,000 for black borrowers and for Hispanic clients $968 more on an average loan of $236,800, according to the suit.
“Chase’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. The lawsuit was filed by U.S. attorney Preet Bharara of the Southern District of New York in Manhattan.
JPMorgan Chase denied the allegations in a response filed in court.
The U.S. government sought damages for borrowers as well as civil penalties and an order preventing further discrimination.
In the suit, Chase reported approximately 360,000 mortgage loans through brokers, of which 40,000 were made to African Americans and 66,000 to Hispanics. The bank originated loans through its retail branches and a wholesale network of mortgage brokers. Chase stopped originating loans through the brokers in 2009.
Chase continues the discrimination despite knowing about the violations, the suit charged.
“Chase regularly monitored between 2006 and 2009 the race and national origin disparities that existed in the total compensation it charges on wholesale mortgage loans, and it knew or should have known that race and national origin disparities in the total compensation it charged existed throughout the period on the national level and in multiple regional markets,” the suit alleges. “By failing to adequately address these disparities based on race and national origin, Chase continued to engage in lending discrimination.”
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