Bank of America settles discrimination allegations for $335 million

Bank of America agreed to pay $335 million to resolve allegations that its Countrywide unit engaged in a widespread pattern of discrimination against qualified African-American and Hispanic borrowers on home loans.

The settlement with the U.S. Justice Department was filed Tuesday with the Central District court of California and is subject to court approval. The DOJ says it's the largest settlement in history over residential fair lending practices.

According to the DOJ's complaint, Countrywide charged over 200,000 African-American and Hispanic borrowers higher fees and interest rates than non-Hispanic white borrowers with a similar credit profile. The complaint says that these borrowers were charged higher fees and rates because of their race or national origin rather than any other objective criteria.

"These institutions should make judgments based on applicants' creditworthiness, not on the color of their skin," said Attorney General Eric Holder. "With today's settlement, the federal government will ensure that the more than 200,000 African-American and Hispanic borrowers who were discriminated against by Countrywide will be entitled to compensation."

Charlotte, N.C.-based Bank of America Corp. bought the nation's largest subprime lender, Countrywide Financial Corp., in 2008.

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