FOR IMMEDIATE RELEASE CR TUESDAY, JANUARY 28, 1997 (202) 616-2777 TDD (202) 514-1888 JUSTICE DEPARTMENT REACHES SETTLEMENT WITH NEW MEXICO LENDER THAT ALLEGEDLY DISCRIMINATED AGAINST HISPANICS WASHINGTON, D.C. -- First National Bank of Dona Ana County, the largest bank in Las Cruces, New Mexico, will pay $585,000 for allegedly discriminating against Hispanic home loan applicants, under an agreement reached today with the Justice Department. Over the past five years the Justice Department has filed eleven lending discrimination cases against financial institutions, ten of which were resolved by voluntary settlements resulting in more than $20 million in damages and penalties. Today's case is the first to challenge discriminatory practices in mobile home lending. Today's settlement, submitted together with a complaint to the U.S. District Court in Las Cruces, resolves allegations that the First National Bank of Dona Ana County engaged in a pattern of discrimination against Hispanic borrowers seeking financing for mobile homes, in violation of the Fair Housing Act and the Equal Credit Opportunity Act. "The Justice Department will continue its effort to root out discrimination in the lending industry," said Acting Assistant Attorney General for Civil Rights Isabelle Katz Pinzler. "A significant portion of residents around Las Cruses live in mobile homes. Mobile home residents should not be denied the credit they may need to secure a place to call home." The settlement resolves allegations that the bank unfairly denied loans to Hispanics trying to purchase mobile homes by applying more stringent underwriting standards to Hispanic applicants than those applied to similarly situated Anglo applicants. The bank also allegedly made greater efforts to obtain information from Anglo applicants to help their chances of qualifying for a loan compared to efforts made in processing the applications of Hispanics. Pinzler noted that the bank fully cooperated with the Justice Department's investigation, and voluntarily took steps to improve its fair lending record. The investigation focused on the bank's practices between January 1992 through March 1995. Under the settlement, the bank will: create a $485,000 fund which will be used to compensate Hispanics who were allegedly unfairly denied mobile home loans; create a $750,000 subsidized mobile home loan fund- -estimated to cost the bank $100,000--designed to redress the past alleged discriminatory practices of the lender; take steps to ensure that all applicants seeking mortgage credit are treated in a fair and nondiscriminatory manner; conduct a program of community outreach to the Las Cruces Hispanic community which includes home buyer's seminars and distribution of information on the lender's mortgage programs. "The First National Bank case is important because entry into the middle class couldn't happen without equal access to credit and housing opportunities," said John J. Kelly, U.S. Attorney in Albuquerque, New Mexico. Kelly also noted that this is the second settlement in recent months involving discrimination in southern New Mexico against Hispanics. In December, the Village of Hatch resolved a Fair Housing Act suit with the Justice Department. According to the 1990 census, more than 25% of all housing units in the Las Cruces area were mobile homes. Fifty-six percent of those were occupied by Hispanics. The Office of the Comptroller of the Currency, which supervises national banks such as Dona Ana, aided the Justice Department in its investigation. # # # 97-036