United Security Bancshares Inc. of Thomasville, Ala., has entered into a settlement agreement with the Department of Justice to resolve allegations that its subsidiary First United Security Bank violated the Fair Housing Act and the Equal Credit Opportunity Act when dealing with African-American borrowers.

Among other things, United Security agreed to revise the standardization of its loan pricing policies, adopt marketing initiatives to expand its business base in predominantly African-American communities and offer $500,000 in subsidies that will help finance new home mortgages and small-business loans in mostly minority areas.

Nonetheless, the company's president and chief executive, R. Terry Phillips, contested the allegations, saying that the bank has a record of serving neighborhoods regardless of race.

"The bank has not discriminated and its lending practices did not violate any law," he said, adding that the settlement disclosed last week was "a business decision." He also said that the bank could not afford to incur "substantial costs that litigation with the Justice Department would entail."

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