WASHINGTON — The Justice Department announced Monday that Citigroup Inc.’s Associates National Bank in Wilmington, Del., had agreed to pay $1.5 million to settle a fair-lending suit.

The suit, filed in 1999 by the Justice Department’s civil rights division, charged that Associates had discriminated against Hispanic credit card applicants by using stricter underwriting standards to evaluate individuals who applied for a credit cards using a Spanish-language form. The complaint also said that those who were approved after filling out the Spanish form were given less favorable credit terms than comparable customers who filled out the form in English, and were excluded from promotional offers extended to English speakers.

“Credit card companies cannot treat applicants differently based on their national origin,” said Bill Lann Lee, assistant attorney general for civil rights, in a press release. “The department is committed to ensuring that all credit applicants are treated fairly and will hold lenders accountable when applicants are not.”

The department alleged that Associates, a $519 million-asset subsidiary of Associates First Capital, engaged in the discriminatory practices from February 1996 to January 1997. The practices were first noticed during the Office of the Comptroller of the Currency’s April 1997 examination of the bank, and were reported to the Justice Department.

Associates First Capital was acquired by Citigroup in November. Community groups, which protested the merger, based many of their objections on Associates’ lending practices.

While agreeing to the settlement, Citigroup denied that Associates had violated the Equal Credit Opportunity Act.

“Although we believe Associates had a strong case and there was no violation of the law, we decided to settle the case in order to put it behind us,” a Citigroup spokesman said. “This case stems primarily from an inadvertent computer programming error that Associates discovered and immediately fixed years ago.”

Under the settlement agreement, Associates will set up a $1.5 million fund to pay damages to consumers affected by its credit card lending practices. Remaining funds, after all claims have been settled, will be used “for consumer education in Hispanic communities in locations to be determined."

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