The DOJ alleged that between 2004 and 2008, Wells Fargo directed about 30,000 African-American and Hispanic borrowers into more costly subprime loans or charged them more than white customers, according to CNN. 

Wells Fargo will pay $125 million in damages to borrowers who were discrminated against and $50 million in down-payment assistance. 

“Wells Fargo is settling this matter because we believe it is in the best interest of our team members, customers, communities and investors to avoid a long and costly legal fight, and to instead devote our resources to continuing to contribute to the country’s housing recovery,” Mike Heid, president of West Des Moines-based Wells Fargo Home Mortgage, said in a statement.

Deputy Attorney General James Cole said in a statement the settlement shows that the federal government will not tolerate discriminatory lending and will hold financial institutions accountable. 

“The practice of steering minority borrowers into higher-priced subprime loans is not just unacceptable, but illegal, and the OCC (Office of the Comptroller of the Currency) is absolutely committed to eradicating these practices,” said Thomas Curry, comptroller of the currency, in a statement. “The action being announced today should send a strong message to every institution that lending discrimination in all its forms will not be tolerated.”

To view the Justice Department statement, click here.