Hudson City Settles Discriminatory Lending Charges for About $33 Million -- Update

By Lisa Beilfuss 

Hudson City Bancorp Inc. will pay almost $33 million to resolve claims that it engaged in discriminatory mortgage lending practices.

The East Coast lender will spend about $27 million for loan subsidy and outreach programs and pay a $5.5 million penalty under a settlement with the Consumer Financial Protection Bureau and the Department of Justice.

The agreement comes as the Federal Reserve prepares to rule on M&T Bank Corp.'s long-stalled acquisition of the regional bank amid concerns about M&T's anti-money-laundering process. A decision is expected by Wednesday.

The agencies claims Hudson City Savings Bank, which operates about 135 branches, provided unequal access to credit to neighborhoods in New York, New Jersey, Connecticut and Pennsylvania by avoiding placing branches, loan officers and marketing products in communities that are mostly Black and Hispanic.

For its part, Hudson City said it decided to settle the matter to avoid litigation with these agencies, though it disagrees with the statistical analysis of loans used in the investigation.

The Department of Justice said the agreement represents the largest residential mortgage redlining settlement in its history.

Write to Lisa Beilfuss at [e-mail]

(END) Dow Jones Newswires

September 24, 2015 13:05 ET (17:05 GMT)

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