The New York State Banking Department has put the finishing touches on a $12 million agreement with Delta Funding Corp. to settle charges of predatory lending.

The department had alleged that Delta, of Woodbury, N.Y., made unfair high-cost mortgage loans that targeted minorities in Brooklyn and Queens. As part of the agreement, the state attorney general and the Department of Justice will end their investigations of the subprime lender. The bulk of the $12 million settlement is $7.25 million in reduced loan payments. Another $4.75 million in Delta stock will be put in a trust fund that will provide restitution to affected customers and finance consumer education.

"This is a very significant settlement,'' said Elizabeth McCaul, acting superintendent of the banking department. ''It's the first time there will be actual dollars repaid to individuals.''

The banking department will continue tomonitor Delta's operations "closely," Ms. McCaul said.

Delta's president and chief executive officer Hugh Miller said in a statement that the company was "pleased" to move on.

"This global settlement will resolve any outstanding investigations into Delta's lending practices and allow us to move forward with our business of providing borrowers with access to credit credit they need and deserve, but is often denied to them by banks and traditional lenders,'' Mr. Miller said.

-- Katharine Fraser

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