Delta Funding Corp. said Wednesday that it has settled a predatory lending lawsuit brought by the New York State Office of the Attorney General.
The settlement also involved the New York State Banking Department and the U.S. Department of Justice. The subsidiary of Delta Financial Corp. denied any wrongdoing, but said it wanted to put the costly suit behind it.
Under the settlement, which replaces Delta's original $6 million settlement with the state attorney general, Delta will make undisclosed changes to its lending practices. It also said it would cut loan payments by a total of $7.25 million for certain borrowers identified by the government and would create a $4.75 million fund to be financed by a grant of 525,000 shares of Delta's common stock valued at $9.10 per share. The fund would be used to pay for consumer educational and counseling programs.
Delta earned $2.2 million, or 14 cents per share, in the quarter ended June 30. This included a charge of 24 cents per share resulting from the previously announced settlement.
-- Hala Habal