CorpusChristi, Texas-based CharterBank will pay $165,820 as part of a settlement with the U.S.Department of Justice to resolve allegations of discrimination.
The complaintagainst Charter Bank, which covers roughly 500 loans that occurred between 2009and 2014, accuses the bank of charging Hispanic customers higher interest rateson vehicle-secured consumer loans, compared to similarly situated non-Hispanicborrowers. The complaint alleges that employees were given permission to changeinterest rates by approximately 3 percentage points upward or downwardregardless of the customer's credit risk.
Besides thesettlement amount, which will be paid to the affected customers, the bank mustalso look out for potential disparities based on national origin in its loansas well as provide employees with equal credit opportunity training.
Before thesettlement, Charter Bank also implemented objective, non-discretionary and non-discriminatorystandards for determining interest rates for consumer loans. Under thesettlement, the bank must maintain these revised policies for a minimum of fouryears.
CharterBank is a unit of CharterBancshares Inc.