PNC Bank settles
PNC Financial Services Group Inc. agreed to pay the U.S. $35 million to settle claims that minorities were charged more for home loans than similarly qualified white borrowers.
National City Bank, which PNC purchased at the end of 2008, violated fair lending laws involving loans made to about 76,000 black and Hispanic borrowers between 2002 and 2008, according to the complaint and proposed settlement filed in federal court in Pittsburgh.
The settlement is the first one reached jointly by both the department and the Consumer Financial Protection Bureau, the CFPB said. On Dec. 20, Ally Financial Inc. agreed to pay $80 million to the department and $18 million to the bureau in an administrative settlement to resolve similar allegations involving auto loans.
“PNC is committed to fair lending for all,” Fred Solomon, a spokesman for Pittsburgh-based PNC, said in an e-mailed statement. “Once PNC acquired National City Bank, we took steps to improve policies and procedures governing the mortgage lending business of National City, discontinue National City’s mortgage broker channel, and discontinue certain practices reviewed by the agencies.”
National City gave its loan officers and brokers the discretion to set borrowers’ rates and fees, according to the bureau. The bank compensated the officers and brokers from extra costs paid by consumers, the bureau said in a statement.
Morgan’s reports loss
Weak sales from its KFC brand franchises hurt Cleveland-based restaurant owner Morgan’s Foods Inc. third-quarter results. Morgan’s Foods reported a net loss of $307,000, or 8 cents per share, for its third quarter ending Nov. 10, compared to a profit of $125,000, or 4 cents per share, for the third quarter a year ago. Revenue was $19 million for the quarter, down from $20 million a year ago. KFC restaurant revenue fell 3 percent from a year ago, Morgan’s said. Morgan’s has 53 KFC restaurants, four Taco Bell restaurants, nine KFC/Taco Bell combined restaurant sites and three Taco Bell/Pizza Hut Express sites.
Consumer hopes up
Consumer confidence in the U.S. rose to a five-month high in December, indicating Americans will keep spending early next year. The Thomson Reuters/University of Michigan index of consumer sentiment climbed to 82.5 from 75.1 in November. Economists in a Bloomberg survey called for 83, according to the median projection. The preliminary reading for December was 82.5.
Men’s store resists takeover
Jos. A. Bank Clothiers Inc. rejected a $1.54 billion takeover offer from Men’s Wearhouse Inc. as too low and said it would continue to seek its own acquisitions. The Men’s Wearhouse offer “significantly undervalued” the company and wasn’t in shareholders’ best interest, Hampstead, Maryland-based Jos. A. Bank said in a statement. Jos. A. Bank’s rejection of the offer represents another turn in a takeover battle that it started in October with a $2.3 billion bid for Men’s Wearhouse. Men’s Wearhouse rejected that offer and later made its own proposal for Jos. A. Bank.
Fiat, UAW negotiate
Fiat SpA Chief Executive Officer Sergio Marchionne restarted negotiations with a United Auto Workers medical trust to buy the remaining shares of Chrysler Group LLC. With an initial public offering of Chrysler on hold, Fiat executives met with representatives of the retiree health-care trust. The meeting followed the trust’s rejection of a higher offer for its 41.5 percent stake in Chrysler earlier this month.
Maryland site selected
MGM Resorts International, the largest owner of casinos on the Las Vegas Strip, was picked by Maryland regulators to build a $925 million resort south of Washington. The ruling by the Maryland Video Lottery Facility Location Commission will let MGM build the state’s sixth casino and the one nearest the U.S. capital, a wealthy metropolitan area of more than 5.8 million residents. MGM beat two rival bidders, including Penn National Gaming Inc., owner of a West Virginia casino that stands to lose business to the new resort.
Compiled from staff and wire reports