J.P. Morgan to pay $55 million to settle allegations it discriminated against minorities. Wells Fargo paid $175m, When are You settling FNB?

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By Pinky Khoabane

A lesson for First National Bank….pay-up and if for nothing else, nip the reputational damage in the bud. 

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J P Morgan will settle for $55 million with the US attorney over allegations that it discriminated against African American and Hispanic borrowers by charging them more in interest rates than it did whites.

The settlement will conclude a federal investigation that started almost seven years ago into whether JP Morgan discriminated against African Americans and Hispanics.

For three years, between 2006 and 2009, brokers working with the bank charged minorities more interest than their white counterparts, in violation of the Fair Housing Act. The Black and Hispanic clients were charged on average $1000 more than their white counterparts.

This is not the first time that a financial institution was fined for charging minorities higher interest rates in the US. Wells Fargo, the largest home mortgage lender, agreed to pay $175 million in 2012 when allegations surfaced that its brokers had charged Blacks and Hispanics higher interest rates.

First National Bank (FNB) is being accused of doing the same with Black low-cost housing clients it took-over from Saambou when it collapsed in 2002. The low cost housing clients were charged more than their counterparts in the high cost housing and the interest charged on their were not given the benefits of a decrease whenever there was an interest rate cut. They were discriminated against in violation of the Constitution of the Republic of South Africa and the Usury Act.

UnCensored has written extensively on the FNB case which is scheduled to go to the Equality Court in March.  http://uncensoredopinion.co.za/blacks-robbed-fnb-running-patience/

Both JP Morgan and Wells Fargo denied any wrongdoing. “We’ve agreed to settle these legacy allegations that relate to pricing set by independent brokers. We deny any wrongdoing and remain committed to providing equal access to credit,” a statement from JP Morgan read.

At the time of settling, Wells Fargo statement read: “Wells Fargo is settling this matter because we believe it is in the best interest of our team members, customers, communities and investors to avoid a long and costly legal fight…”.

 

 

 

6 Comments on "J.P. Morgan to pay $55 million to settle allegations it discriminated against minorities. Wells Fargo paid $175m, When are You settling FNB?"

  1. Peggy Nomsa Motsohi | January 19, 2017 at 9:20 am | Reply

    The question is, Do the customers/clients overcharged by these banks reimbursed? Or the funds get swallowed by lawyers and state?

    • Pinky Khoabane | January 19, 2017 at 3:01 pm | Reply

      You raise a very important issue Sis Nomsa. We’ve seen how these slap on the wrists for corporates involved in price fixing goes back into Treasury instead of benefitting the people. Well, you know what they say – that by going back into the state the money gets back to provide the services. In the bread price fixing for example, one would have expected that the price of bread would have been reduced significantly to make up for the many made by these cartels.

      In the Wells Fargo case, the consumers were compensated. Will follow the JP Morgan story, it just broke yesterday.

      Kindest

      PK

  2. Keep up the good work PK & all UnCensored brilliant and selfless team;
    However there is something which seems to be bothering me and other fellow citizens;
    A short while ago, PK and other writers who are doing the wonderful work by leaving no stone unturned, those hardworking journalists were being belittled and labelled as dillusioned;

    Well, what is bothering myself today is that the mainstream media is trying to take/steal credit for this job well done; ironically these are the media outlets whose corruption reporting were one-sided, but suddenly they (mainstream media) sing the tune similar to that of UnCensored;

    Perhaps PK should also consider a career of becoming a prophet, evangelist or a pastor [ha ha ha he heh], I am saying this since your work is also bearing fruits by getting oldest devils to repent, but if they truly are [repenting].

    #Pheny’ibheshu

    “Umhla sibuya kothula kuthi du, koduma ombayimbayi phezu kwentaba” [singig…]

    • Pinky Khoabane | January 19, 2017 at 10:46 am | Reply

      Thank you K.M. In life if you dont belong to herd mentality, you always get attention – bad and good. It comes with the territory.

      Kindest

      PK

  3. In December 2011 it was reported that the Bank of America was fined $335 million for minority discrimination for charging higher interest rates on loans to African-American and Hispanic American Borrowers.
    Time is running out for FNB to come to the negotiating table and settle all discriminatry overcharges or face the nessary consequences.
    FNB bought the R2.8 billion low cost housing book from Saambou in 1999, before the Bank went belly-up in February 2002. This was confirmed in the founding affidavit of the Curator, Mr. T.J. Louw soon after his appointment. Therefor, FNB was directly involved in the discrimination of Saambou bonds of low cost housing as they were the owners of the bonds.

    • Pinky Khoabane | January 19, 2017 at 2:51 pm | Reply

      Emerald, Im glad you wrote in because there are many people who think your expose that Saambou and then FNB discriminated on the basis of race is just a figment of your imagination. Many and there’s a reader here on UnCensored who constantly questions the stories on FNB discrimination of blacks in the low cost housing.
      I hope now that we’ve shown that the notion of greed and using race to deprive others, more so the poor, of benefits of an interest rate cut is real. $355m Bank of America, JP Morgan $55m & Wells Fargo $175m.

      Message to FNB should be clear, you cant keep running forever.

      Keep up the good work.

      Kindest

      PK

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