Fifth Third Bancorp agreed to pay $21.5 million to settle allegations it discriminated against minorities, the latest case in a federal crackdown against lending discrimination.

It follows a case federal officials reached last week with Hudson City Bancorp Inc. to resolve allegations that the New Jersey based lender intentionally withheld mortgages from minorities, a practice known as "redlining."

At Fifth Third, the Department of Justice and Consumer Financial Protection Bureau said the regional bank charged higher dealer markups to minority car buyers, regardless of their creditworthiness. As a result, the authorities said thousands of minority borrowers were charged, on average, more than $200 more for their auto loans between January 2010 and September 2015.

Separately, federal authorities said Cincinnati-based Fifth Third Bank's telemarketers deceptively sold so-called debt protection coverage to credit card customers, misrepresenting costs and fees among other alleged violations.

Under the terms of the agreement, the regional bank, which didn't admit wrongdoing, will pay a $500,000 civil penalty, along with $3 million to some 24,500 affected credit card customers and $18 million to auto loan customers.

Fifth Third Bank has about 1,300 branches in 12 states, concentrated primarily in the Midwest and Southeast.

Shares slid 2.4% to $18.67 in afternoon trading, down 8.4% for the year.

Write to Maria Armental at maria.armental@wsj.com

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(END) Dow Jones Newswires

September 28, 2015 15:45 ET (19:45 GMT)

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