What happened: 2011 Countrywide settlement
On December 21, 2011, the Justice Department announced a $335 million settlement with Countrywide Financial, then owned by Bank of America, resolving allegations of Fair Housing Act and Equal Credit Opportunity Act violations. The NYT reported it as the largest residential fair-lending settlement then on record. DOJ said more than 200,000 African-American and Hispanic borrowers were charged higher fees and rates than similarly qualified white borrowers from 2004 to 2008, and that more than 10,000 minority borrowers were steered into subprime loans when similar white borrowers received prime loans. Countrywide denied the allegations. A Bank of America spokesman said the practices were Countrywide’s before the 2008 acquisition.
What happened: 2020 $1 billion pledge
On June 2, 2020, Bank of America announced a $1 billion, four-year commitment aimed at economic and racial inequality, with a focus on communities of color. On September 8, 2020, the bank said it had directed $300 million, including jobs work in Black and Hispanic/Latino communities and equity investments in minority depository institutions. Those are the bank’s allocation labels, not a $1 billion cash gift to Black households.
The Cookout read
Mixed. The Countrywide settlement is a landmark fair-lending episode about Black and Hispanic borrowers, even as the bank blamed the acquired unit. The 2020 billion is a multi-year mix of investments and community support.