FOR IMMEDIATE RELEASE                                          CR
WEDNESDAY, MAY 7, 1997                             (202) 616-2765
                                               TDD (202) 514-1888
     WASHINGTON, D.C. -- A northwestern Nebraska bank, which
unfairly charged American Indian borrowers higher interest rates
for consumer loans, will pay $275,000 under an agreement reached
today with the Justice Department.

     The settlement, filed in U.S. District Court in Rapid City,
South Dakota, resolves an April 1996 Justice Department suit
charging the First National Bank of Gordon, Nebraska, with
violating the federal Equal Credit Opportunity Act and the Fair
Housing Act of 1968. 
     Under the settlement, the bank will pay damages and waive
loan costs to the victims of the discrimination -- American
Indians who mostly reside on the Pine Ridge reservation in South

     "Every community needs fair access to credit, including
American Indian reservations," said Acting Assistant Attorney
General for Civil Rights Isabelle Katz Pinzler.  "No one should
be charged a higher rate for credit just because of the color of
his or her skin." 
     Today's agreement stems from a matter referred to the
Justice Department by the Office of the Comptroller of the
Currency (OCC), the federal agency which supervises national
banks such as the First National Bank of Gordon.  The referral
followed an OCC examination into the lending practices of the
bank that uncovered discrepancies in treatment of American

     After further investigation, the Justice Department
determined that until at least March 1994, the bank charged its
American Indian customers considerably higher interest rates than
non-Indian customers, in violation of federal fair lending laws.  
Before that time, the bank did not use formal criteria for
setting interest rates on consumer loans and instead gave broad,
unreviewed discretion to its loan officers in setting rates. 

     Under the settlement the bank has agreed to:

     create a $175,000 fund which will be used to compensate 
     American Indian bank customers who were victims of the
     alleged pricing discrimination;

     set aside a total of $100,000 to pay the fees or charges for
     documentation and credit bureau reports for consumer loans
     applied for by residents of the Pine Ridge Reservation;

     conduct a personal, money management education program  for
     persons on the Pine Ridge Reservation designed to inform
     people on how to establish and manage credit with the bank;

     take affirmative steps to increase the pool of qualified
     American Indian applicants for positions at the bank,
     particularly for positions as loan officers.

      "The ability to gain credit is crucial to the economic
growth of all communities, large and small,"  said Karen E.
Schreier, U.S. Attorney in South Dakota. "Today's agreement will
ensure that every American Indian customer is treated fairly 
when seeking a loan, and will compensate those who have suffered
discrimination in the past."
     This is the second settlement reached by the Justice
Department alleging lending discrimination against American
Indians living on or near the Pine Ridge Reservation. 
     In January 1994, the Justice Department settled a suit
against the Blackpipe State Bank of Martin, South Dakota, which
allegedly refused to make secured loans where the collateral was
located on a reservation and which placed credit requirements on
American Indians which it did not place on whites.  Under that
agreement, the bank created a $125,000 fund to compensate victims
of the alleged discrimination.  

     Over the past five years the Justice Department has obtained
12 settlements totaling more than $20 million with financial
institutions that allegedly engaged in lending discrimination.

     Today's agreement has been approved by the court.
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