West Texas Bank Accused of Racial Discrimination Reaches Settlement

WASHINGTON – A Texas bank accused of discriminating against Hispanics will pay $140,000 to compensate hundreds of victims, after a settlement was reached with the Justice Department last week.

First United Bank, the entity involved in the lawsuit, is said to have charged higher prices on unsecured consumer loans made to Hispanic borrowers, a U.S. Attorney’s Office press release states. First United Bank is in Dimmitt, a small community between Lubbock and Amarillo on U.S. 385.

When the FDIC referred the allegations to the Civil Rights Division of the Justice Department, a complaint was filed in U.S. District Court for the Northern District of Texas. Also filed was the settlement, which requires the bank to monitor its loans for potential disparities based on national origin and provide equal credit opportunity training to its employees. First United Bank will also maintain its revised pricing policies to ensure that the price charged for its loans is set in a non-discriminatory manner consistent with the requirements of ECOA. The agreement also prohibits the bank from discriminating on the basis of national origin in any aspect of a credit transaction.

“The Civil Rights Division is committed to ensuring that lenders price all types of loans based on appropriate credit factors and not based on prohibited factors such as national origin,” said Acting Assistant Attorney General Vanita Gupta for the Justice Department’s Civil Rights Division. “We commend First United Bank for implementing a system of loan pricing that provides objective guidance to the bank’s employees.”