WASHINGTON — The Justice Department said Thursday that SunTrust Banks Inc.'s (STI) mortgage-lending unit would pay $21 million to settle charges that it discriminated against minorities seeking loans.
The government alleged that SunTrust charged higher fees and interest rates to more than 20,000 black and Hispanic borrowers. Under its review of more than 850,000 loans made between 2005 and 2009, the government said it found that SunTrust made the charges based on the borrowers' race rather than their risk of default.
The Justice Department said the case began after the Federal Reserve spotted "potential patterns or practices of discrimination" and referred the case to the Justice Department's civil-rights division.
"SunTrust strongly believes in the principles of fair lending; we are pleased to have reached a settlement and put this matter behind us," said SunTrust spokesman Michael McCoy.
The settlement requires that SunTrust compensate victims of the discrimination.
