First National Bank of Gordon, Neb., agreed Wednesday to pay $275,000 to settle charges that it forced members of a northwest Nebraska Indian tribe to pay more than whites for consumer loans.
The bank will spend $175,000 to compensate victims of pricing discrimination and $100,000 to provide discounted loans to residents of the Pine Ridge Reservation. It also will conduct education programs on money management and seek to hire members of the tribe as loan officers.
"They deserve some applause for reaching out to Indians while others don't," said Paul F. Hancock, the acting assistant attorney general for civil rights. "But they are also obligated to treat Indians fairly and here they were charging them 5 percentage points more than non-Indians."
First National's lawyer Michael Smith said the bank settled to avoid the cost of litigation. He added that the bank "continues to assert that no discrimination occurred." The Department of Justice sued First National in April 1996 for violating the Equal Credit Opportunity Act by allowing loan officers to charge Indians substantially more than whites for car, mobile home, and home improvement loans.