Business news in brief

Bank, feds settle discrimination case

NEW YORK -- The Department of Justice and the Consumer Financial Protection Bureau reached a settlement with Mississippi-based BancorpSouth over allegations that the bank deliberately discriminated against members of minority groups in its lending practices.

BancorpSouth, a medium-size regional bank with $10.6 billion in assets, deliberately avoided building branches in predominantly black neighborhoods in Memphis from at least 2011 to 2013. The bank also denied loans to blacks and members of other minority groups when compared with neighborhoods with smaller minority-group populations, the Justice Department and consumer protection agency said, and those members of minority groups who were given loans were given higher interest rates when compared with white loan applicants.

Tupelo, Miss.-based BancorpSouth had 22 branches in the Memphis area between 2011 and 2013, all of which were located outside neighborhoods with large minority-group populations.

If approved by the court, BancorpSouth Inc. will provide $4 million in direct loan subsidies in predominantly black neighborhoods in Memphis, spend at least $800,000 on community programs and minority-group outreach, $2.78 million to black customers who were overcharged or denied loans, as well as a $3 million penalty.

BancorpSouth disagrees with the allegations and doesn't admit to any of them, said John Lovallo, a spokesman for the bank.

"The decision to settle was made to avoid prolonged litigation and to put the matter behind the bank," Lovallo said.

The bank has 45 branches in Arkansas.

-- The Associated Press

LR executive named to Tech Park board

John Burgess, president and co-founder of Mainstream Technologies in Little Rock, has been appointed to serve on the Little Rock Technology Park Authority Board.

Burgess previously served as chairman of the North Little Rock Chamber of Commerce and was a member of the board of directors for the Little Rock Regional Chamber of Commerce.

"I am pleased that Mr. Burgess has accepted a position on the Tech Park Board," said Joel Anderson, University of Arkansas at Little Rock chancellor. "His experience as an entrepreneur and his knowledge of the interplay of technology and business operations will be of great value to the board as it works to develop the Little Rock Technology Park."

Burgess will replace Mary Good, dean emeritus and special economic development adviser to the chancellor at the University of Arkansas at Little Rock.

-- Stephanie Lamm

Wal-Mart ShippingPass free for 30 days

Wal-Mart Stores Inc. is offering a free 30-day trial on its two-day unlimited shipping service in ongoing efforts to grow its e-commerce business and challenge Amazon.com.

Wal-Mart opened the ShippingPass pilot program to new customers on a trial basis Wednesday.

Paying members who already use the service will receive an extra month for free.

The offer comes weeks after Wal-Mart shortened the delivery time for ShippingPass subscribers from three days to two days to rival Amazon Prime's service. It also trimmed $1 off the annual price to $49. Amazon Prime is $99 annually, but it includes perks like access to movies, television shows and music that can be streamed to televisions and mobile devices.

In addition to the ShippingPass trial, Wal-Mart said it will start offering discounts on items beginning Friday. The discounts, which Wal-Mart calls "rollbacks," typically last 90 days or longer.

-- Robbie Neiswanger

$61M bid falls short for giant diamond

The biggest diamond found in more than 100 years failed to sell at an auction in London after the highest bid of $61 million didn't meet the company's minimum selling price.

Based on a diamond sale in May, the 1,109-carat diamond that's called Lesedi la Rona, or "our light" in the Tswana language spoken in Botswana, might have sold for about $86 million, which would have made it the most expensive rough gem on record. Yet the $61 million bid didn't reach the so-called reserve price at a Sotheby's auction on Wednesday night.

The giant stone was unearthed at Lucara Diamond Corp.'s Karowe mine in Botswana. The company is gaining a reputation for producing the world's biggest and best stones and sold an 813-carat diamond for $63 million in May, a record, to Nemesis International DMCC, a Dubai-based rough-diamond trading company.

The Lesedi la Rona, just smaller than a tennis ball, is second in size only to the Cullinan, a 3,106-carat gem found near Pretoria in South Africa in 1905. It was cut to form the Great Star of Africa and the Lesser Star of Africa, which are set in the Crown Jewels of Britain.

-- Bloomberg News

GE Capital gets U.S. OK to drop label

NEW YORK -- GE Capital, the financing unit of General Electric Co., won approval from federal regulators Wednesday to drop its designation as a "systematically important financial institution," a title that comes with added scrutiny and stricter rules.

The label, which has been handed out by the Financial Stability Oversight Council since the 2008 recession, is given to companies that the U.S. regulator deems so large that their failure could threaten the entire economy. Along with stricter supervision, being designated a "systematically important financial institution" can be costly for a company. Life insurer MetLife has sued the U.S. to remove the title.

GE Capital was given the label three years ago. The company pushed the U.S. to drop it in March, arguing that it sold many of its assets, making it a much smaller lender. Today, GE Capital is focusing on offering loans to companies that want to buy GE's industrial products, such as airplane engines or medical equipment.

In a statement about its decision, the Financial Stability Oversight Council said GE Capital is now "significantly smaller and safer."

Shares of Fairfield, Conn.-based General Electric rose 61 cents, or 2 percent, to close Wednesday at $30.55.

-- The Associated Press

Business on 06/30/2016

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