AIG subsidiaries pay $6 million settlement for racial discrimination

Two subsidiaries of bailed out insurer AIG have agreed to pay at least $6 million to resolve claims of discriminatory lending, the Justice Department announced.

The subsidiaries, a bank and a mortgage lender, allegedly charged higher fees to African American borrowers.

The higher fees occurred between 2003 and 2006, before the federal government bailed out the insurer with a maximum exposure of $180 billion in taxpayer aid. The insurer was crippled under the weight of poor trades in financial derivatives products.

"Today’s settlement is significant because it marks the first time the Justice Department has held a lender responsible for failing to monitor its brokers to ensure that borrowers are not charged higher fees because of their race. If necessary, it will not be the last time," Thomas Perez said, assistant attorney general said in a press release.