As part of the settlement, it is also reviewing subprime mortgages made by in-house loan officers to determine whether any black or Latino borrowers may have qualified for prime mortgages instead. The compensation for those customers would be added to the $175 million settlement.
Justice estimated that identifying and distributing the payments to consumers would take about a year. But it also acknowledged that the long-term consequences to minority communities could take far longer to repair.
The Washington Post reported this week that a growing chorus of consumer advocates, economists and civil rights leaders are raising concerns that the fallout from the boom in subprime lending has endangered the financial futures of black Americans by lowering their credit scores.
“The impacts of lending discrimination and the harm to a person’s credit can be far reaching — inhibiting a range of opportunities that affect a person’s ability to find housing, good employment or access higher education,” said Perez, the assistant attorney general.