Chevy Chase Bank To Pay $2.85M To Resolve Government’s Fair-Lending Suit

by Tara Arick on October 3, 2013 · 0 comments

in Banking

The federal government on Sept. 30 filed in Virginia federal court a complaint and settlement agreement in which Chevy Chase Bank F.S.B. agreed to pay $ 2.85 million to resolve claims that it engaged in a pattern of discriminating against qualified African-American and Hispanic borrowers when providing them with mortgage loans between 2006 and 2009 (United States of America v. Chevy Chase Bank, F.S.B., No. 13-01214, E.D. Va.).

According to the complaint, which was filed in the U.S. District Court for the Eastern District of Virginia, the lender violated the Fair Housing Act (FHA) by charging higher prices on mortgage loans provided to African-American and Hispanic borrowers compared to similarly situated Caucasian borrowers. According to the proposed settlement agreement, 3,100 African-American and Hispanic borrowers were victims of Chevy Chase Bank’s practices and will receive monetary compensation.

The government filed the present suit after the U.S. Department of Justice received a referral from the Office of the Comptroller of the Currency in 2010. Capital One N.A. purchased Chevy Chase Bank in 2009, but the claims in the lawsuit relate only to mortgage loans originated by Chevy Chase Bank.

The terms of the proposed settlement are subject to a 30-day public comment period.

Steve Gordon of the U.S. Attorney’s Office in Alexandria is counsel for the government. Anand Subram Raman and David Emmett Carney of Skadden Arps Slate Meagher & Flom in Washington, D.C., represent Chevy Chase Bank.

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