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Martin Moylan
St. Paul, Minn.

U.S. Bank pays $200 million to end federal lending probe

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U.S. Bank is paying a $200 million fine to settle a federal investigation of mortgage lending practices.

The Minneapolis-based financial giant ignored Federal Housing Administration insurance and other mortgage lending requirements from 2006 through 2011, causing substantial losses to taxpayers and contributing to home foreclosures nationwide, the U.S. Justice Department said Monday.

Financially, the settlement is no big deal for the bank, which earned nearly $6 billion last year, said Dan Werner, a banking analyst with the investment research firm Morningstar.

"It's fairly inconsequential. It gets a distraction behind them," he said. "I think if you talk to most customers of U.S. Bank, I don't know that their opinion of the bank is going to change because of this."

The bank said it admits no liability and settled to avoid a long and costly legal battle and distractions to its business. The feds have reached bigger mortgage lending settlements with larger banks.

The settlement does not prevent state and federal authorities from pursuing other actions.