Washington State Department of Financial Institutions

News Release

Thursday, December 23, 2010


Lyn Peters, Director of Communications
PH (360) 349-8501, lyn.peters@dfi.wa.gov

Deborah Bortner, Director Division of Consumer Services
PH (360) 902-0511, dbortner@dfi.wa.gov


More Than 100 Washington Homeowners Are Receiving A Total Of $650,000 From Countrywide Home Loan Case Settlement

Washington DFI enters Consent Order in 2008 case alleging discriminatory home loan practices

Olympia – The Washington State Department of Financial Institutions (DFI) is pleased to announce a settlement has been reached in a consumer protection case regarding Countrywide Home Loans (CHL) that has been ongoing for more than two years.

On June 23, 2008, DFI filed a Statement of Charges against Countrywide Home Loans alleging the company was discriminating against ethnic and racially protected classes by offering loan products that were less favorable than those offered to non-protected classes.

On July 1, 2008, Bank of America purchased Countrywide Home Loans. As a result, CHL became a subsidiary of the national bank and DFI lost jurisdiction over any loans made after that time.

The Department conducted more than 2,400 hours of examination and investigation to determine the extent of the problem. DFI examiners evaluated more than 30,000 loans, and discovered more than 100 alleged victims of predatory pricing based upon comparisons with statistically significant control group members.

Besides the complex nature of DFI’s allegations, the case was complicated with numerous changes in the Washington State Consumer Loan Act over the period of time our allegations covered.

In the settlement, DFI identified 123 victims of alleged discriminatory pricing. Each of these Washington residents will receive a settlement ranging from $997 to $26,176. The amount received depends upon the type of loan, the number of predatory features in the loan and whether or not the consumer was foreclosed upon. The full $650,000 settlement is being dispersed to the affected consumers. DFI is not retaining any of the settlement.

“It’s important to recognize the tenacious efforts of DFI’s examination, investigation and legal teams,” DFI Director Scott Jarvis said. “While Countrywide disagreed strenuously with DFI’s allegations, DFI’s staff steadfastly pursued restitution for consumers - and now, nearly two years later, the case is finally settled.”

View the Consent Order at http://dfi.wa.gov/cs%20orders/countrywide-consent.pdf.

About DFI
www.dfi.wa.gov ▪ 360.902.8700 ▪ 877.RINGDFI (746.4334)
The Washington State Department of Financial Institutions regulates a variety of financial service providers such as banks, credit unions, mortgage brokers, consumer loan companies, payday lenders and securities brokers and dealers. The department also works to improve financial education throughout Washington through its outreach programs and online clearinghouse www.dfi.wa.gov/financial-education. In addition to posting information about licensees and administrative actions, DFI uses the Web and social media to provide financial education information:

About Consumer Services
www.dfi.wa.gov/cs ▪ 360.902.8703 ▪ 877.RINGDFI (746.4334)
The mission of the Division of Consumer Services is to protect consumers from illegal and fraudulent lending practices. The division accomplishes its mission through licensing, licensee examinations, investigations, and enforcing selected state and federal statutes and rules. Consumer Services regulates the business activities of consumer loan companies, mortgage brokers, money transmitters and currency exchangers, as well as check cashers and sellers, also known as "payday lenders." The Division is entirely self-supporting, with funding provided by licensing, auditing, and policing of regulated businesses and individuals. No money is received from the state General Fund or other public revenue source.

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