Bank of America to pay $335M to settle discrimination claims

Charlotte, N.C.-based Bank of America Corp. last week agreed to a $335 million settlement following allegations that Countrywide Financial Corp. engaged in racial discrimination. Bank of America acquired Countrywide Financial in 2008.

The settlement stems from claims by the U.S. Department of Justice, which alleged that from 2004-08, Countrywide Financial engaged in discriminatory practices resulting in black and Hispanic customers paying higher prices for loans, according to a news release.

The DOJ received data on more than 2.5 million loans throughout the process. Following its investigation, the department claimed more than 200,000 Hispanic and black borrowers were assessed higher fees for their loans than Caucasian borrowers, not based on borrower risk but based on race or national origin, according to the release.

The department also alleges that Countrywide Financial Corp. violated the Equal Credit Opportunity Act by requiring spouses who were not applicants on home loans to sign away their rights to their homes.

The $335 million settlement will be used to identify and compensate individuals affected by the practices, according to the DOJ.

Federal officials said Bank of America cooperated with the DOJ to address the allegations concerning Countrywide Financial.

Shares of publicly traded Bank of America Corp. (NYSE: BAC) were trading at $5.40 as of 11:15 a.m., compared to its 52-week range of $4.92 to $15.31.[[In-content Ad]]