Hudson City Bancorp Inc. will pay almost $33 million to resolve claims that it engaged in discriminatory mortgage lending practices.

The East Coast lender will spend about $27 million for loan subsidy and outreach programs and pay a $5.5 million penalty under a settlement with the Consumer Financial Protection Bureau and the Department of Justice.

The agencies claims Hudson City Savings Bank, which operates about 135 branches, provided unequal access to credit to neighborhoods in New York, New Jersey, Connecticut and Pennsylvania by avoiding placing branches, loan officers and marketing products in communities that are mostly Black and Hispanic.

Representatives for Hudson City didn't immediately respond to requests for comment.

The Department of Justice said the agreement represents the largest residential mortgage redlining settlement in its history.

Write to Lisa Beilfuss at lisa.beilfuss@wsj.com

Subscribe to WSJ: http://online.wsj.com?mod=djnwires

(END) Dow Jones Newswires

September 24, 2015 13:05 ET (17:05 GMT)

Copyright (c) 2015 Dow Jones & Company, Inc.
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