U.S. Bank has agreed to a settlement of $200 million after being accused of failing to thoroughly review the credit worthiness of thousands of applicants due to government-issued mortgage loans between 2006 and 2011.

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U.S. Bank is not admitting fault or liability, yet it is cooperating with the Department of Justice to pay their settlement.

Steven Dettelbach, the northern district of Ohio’s U.S. attorney, said, “What motivates the kind of conduct you see in this case is the blind pursuit of profit.” He added, “U.S. Bank’s lack of due diligence cost taxpayers millions of dollars when it received reimbursement from a Department of Housing and Urban Development insurance fund after loans went bad.”

The U.S. Bank settlement agreement included a statement of facts that outlined the abuse of authority in issuing HUD loans. HUD stands for the United States Department of Housing and Urban Development, and it aids in providing affordable housing in America. Since U.S. Bank was able to provide HUD loans without direct approval, the bank was supposed to follow HUD guidelines before issuing government-guaranteed mortgage loans. Instead, this popular program was used to sign the loans of thousands of borrowers who eventually could not afford to live in their home any longer, resulting in losing their status as a homeowner and ruining their financial history and credit worthiness.

Will U.S. Bank assist distressed home owners?

There is no clear indication as to whether or not U.S. Bank will allocate funds to help distressed homeowners. After contacting a representative via chat, the representative informed me the following, “No programs have been established yet since the event is so recent. I would check back with us at a later time to see if we have anything to offer.”

With no plan in motion to help distressed homeowners, or previous homeowners who lost their property, the bank should allocate funds to help those who were negatively impacted by their negligence. The bank can help reestablish its reputation by showing a sign of good faith in helping those that it wronged. Failing to provide assistance may tarnish their reputation with prospective home buyers, who are starting to look at more than interest rates when searching for a loan. People want reassurance they are making a financial commitment to a bank they can trust.

U.S. Bank should take note from banks such as Wells Fargo, who settled for $67 million on its civil litigation involving mortgages for following similar practices. Wells Fargo clearly outlined different ways it would assist those affected through improper practices; the bank used the money to help home buyers who faced foreclosures to receive down payment assistance for a new home, provide counseling for home owners and to improve its lending and service operations to prevent improper conduct from happening again.

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