The Department of Justice has more than a dozen open investigations into violations of the nation's fair lending laws -- probes that could lead to charges against mortgage firms if investigators find a pattern of abuse, according to a key department official.
These investigations, which involve redlining, wholesale and retail pricing, steering and consumer credit -- among other allegations -- are on top of five other open cases in which lawsuits have been authorized if negotiations with the lawbreakers do not come to fruition, DOJ's Eric Halperin said at CBA Live 2011 in Orlando.
Halperin, who is special counsel for fair lending in the department's Civil Rights Division, did not reveal the exact nature of any of the investigations. But he said the current enforcement docket is similar to actions recently levied against the lending arm of AIG, Bank of America, and Citizens Republic Bancorp. And it contains some big cases. "We will bring relatively few cases in the next several months," he said. "But they will be larger ones."
Under Attorney General Eric Holder, the Justice Department has made fair lending a priority. It has created a new fair lending unit with lawyers, economists and statisticians, and together with bank regulatory agencies, is focusing on civil rights issues unique to lending.
Halperin told the conference that "mortgages are a focus of the department and will continue to be."
DOJ enforces three statutes – the Fair Housing Act, the Equal Credit Opportunity Act and the Servicemens' Civil Relief Act. And the agency is now collaborating with not just banking regulators but also state attorneys general. And when the Consumer Finance Protection Bureau opens its doors, Halperin said, it will work closely with that agency, too.
