The U.S. Department of Justice is said to be investigating allegations that Wells Fargo discriminated against black borrowers, offering high-interest, subprime mortgages that seemed geared to lead to default.

Citing three sources with “direct knowledge of the probe,” the Huffington Post reports the DOJ is preparing a lawsuit against the bank, which is negotiating a settlement to keep the accusations from becoming a public spectacle.

Last week, the Federal Reserve hit Wells Fargo with an $85 million fine for broader but non-discriminatory accusations, but the DOJ’s investigation of allegedly discriminatory lending echoes a suit filed by the city of Baltimore against the bank, accusing it of targeting predominantly black neighborhoods with crummy loans.

Although Wells Fargo did not respond to HuffPo about the DOJ investigation, a spokesperson said the bank does not discriminate:

“We have a very strong commitment to serving all customers along the credit spectrum, and we do so without bias. That’s the type of responsible lending that we practice.”

Wells Fargo Target Of Justice Department Probe; Agency Alleges Discriminatory Lending [Huffington Post]

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