A home mortgage lender that previously settled Federal Trade Commission charges of discriminatory lending will have to hire an outside consultant to make sure it does not illegally charge higher prices to African-American and Hispanic consumers, according to the FTC's Bureau of Consumer Protection.
Gateway Funding Diversified Mortgage Services, and its general partner, Gateway Funding Inc, agreed to hire the consultant as part of a deal with the FTC. According to the government agency, the lender failed to create an effective fair-lending monitoring program even though it agreed to do so in December 2008 to settle charges that it had engaged in illegal lending practices, violating the Equal Credit Opportunity Act.
Under the modified court order announced Friday, the third-party consultant must be approved by the FTC, and must conduct a detailed analysis and annual assessments of Gateway's lending for five years. Gateway will have to take any remedial steps that the consultant recommends. The agreement also limits Gateway’s discretion over pricing until the consultant certifies that an adequate monitoring program is in place.