article: The Department of Justice filed suit on May 7, 1996, in the U.S. District Court for the Eastern District of New York against a mortgage company subsidiary of Fleet Mortgage Financial Group alleging that the company engaged in discriminatory lending practices. The Department of Justice specifically argued that the defendant charged African American and Hispanic borrowers higher prices for home mortgage loans than comparatively qualified white borrowers by requiring African American and Hispanic borrowers to pay higher interest rates or upfront fees. These allegations surfaced after the Federal Reserve completed a routine compliance check with two of Fleet Mortgage Financial Group's branches in Westbury, New York and Woodbridge, New Jersey. The parties settled the case on June 24, 1996, which was approved by the court. Under the settlement agreement, the defendant was required to establish a four million dollar settlement fund to compensate minority borrowers who the parties agreed had paid higher prices for loans between August 1993 and June 1994. The fund was also to contribute to a fair lending outreach campaign. In addition, the defendant was permanently enjoined from continuing such discriminatory practices. The case is now closed.
summary: The Department of Justice filed suit on May 7, 1996, in the U.S. District Court for the Eastern District of New York against a mortgage company subsidiary of Fleet Mortgage Financial Group alleging that it engaged in discriminatory lending practices. The case settled.