First Mariner Bank will pay up to $1 million to settle federal allegations that it overcharged black, Hispanic and female borrowers for residential mortgage loans.
The Baltimore-based bank has not admitted to any wrongdoing, but agreed to settle the dispute with the Federal Deposit Insurance Corp. rather than incur additional legal expenses, according to a filing by its parent company, First Mariner Bancorp, with the Securities and Exchange Commission on Friday.
Dennis Finnegan, executive vice president of First Mariner, said in an interview Tuesday that payments to borrowers will depend on the loan they received. He said the bank will contact borrowers who should be reimbursed.
Regulators said the bank violated the Equal Credit Opportunity Act and the Fair Housing Act in 2005, 2006 and 2007, by discriminating against some borrowers, mostly in Northern Virginia. The borrowers paid higher interest rates and more in points on home mortgages “than those charged to similarly-situated white or male borrowers,” according to the filing.
Finnegan said the office involved in the discrimination, a wholesale lending operation in Northern Virginia, closed in 2007.
First Mariner also allegedly violated the Federal Trade Commission Act in 2006 and 2007 by misleading borrowers on the costs of adjustable-rate mortgage loans or ARMs.
