Hudson City Savings Bank Pays $32.75 Million To Settle Claims It Discriminated Against Blacks And Latinos
Hudson City Savings Bank has settled claims of mortgage discrimination by the federal government for $32.75 million that it violated federal laws when it gave loans to members of the black and Hispanic communities. Claims by the Consumer Financial Protection Bureau and the Department of Justice alleged that Hudson City Saving Bank’s branches chose mortgage brokers and marketed loans that discouraged borrowers in predominantly minority communities.
U.S. Attorney Paul J. Fishman of the District of New Jersey told ABC News, “Those specific practices show that Hudson City Savings Bank violated federal law by structuring its business to avoid providing credit based on race and national origin.”
If approved by the court,, Hudson City Savings Bank would need to pay $25 million for a loan subsidy program to increase access to mortgages in black and Hispanic neighborhoods. It would also owe $2.25 million for community programs and outreach and $5.5 million in penalties.
The settlement and other government investigations into the lending policies of HudsonCity Savings Bank and other banks indicates that housing and lending segregation dating back to the 1930s that discriminates against minority homeowners remains a problem decades after the passage of the 1968 Fair Housing Act.
Hudson City Savings Bank has $35.4 billion in assets and 135 branches in New Jersey, New York, Connecticut and Pennsylvania. The government announced the deal as M&T Bank is attempting to finalize its acquisition of Hudson City Savings Bank.