Justice Dept. reaches $700,000 settlement with Chicago bank accused of discriminating against minorities

Jet, June 26, 1995

The U.S. Justice Department recently reached a $700,000 settlement with a Chicago bank that had been accused of discriminating against minority home loan applicants.

The settlement resolved allegations that Northern Trust Corporation had gone out of its way to help White applicants get credit while not providing the same assistance to Black and Hispanic applicants.

The case marked the first time the Justice Department accused a bank of violating fair lending laws based on a file-by-file study of loan applications, the Washington Post reported.

Assistant Attorney General Deval L. Patrick said in a statement, "It is unfair for lenders to take White applicants by the hand and walk them through the loan process, while leaving Black applicants on their own and then denying their applications."

The Justice Department complaint alleged that in 1992 and 1993, bank employees accepted explanations of poor credit histories and took other steps for White applicants that weren't offered Blacks and Hispanics.

Northern Trust agreed to pay $565,000 to more than 60 Black and Hispanic loan applicants who were denied credit, and will set aside at least $133,500 more to compensate other applicants who may be identified after further review of the bank's records, according to the Justice Department.

The bank has denied that it discriminated.