There are many regulations regarding fair lending , yet financial institutions still sometimes fall short of strict compliance . It is important for financial institutions to routinely review their practices , and how they may be affecting different communities . Although looking at things like credit history , income , property condition , neighborhood amenities and services seem reasonable when considering lending , it is easy to begin to generalize the information and trends . Sometimes this generalization leads to blocking off or avoiding these communities and should be avoided at all costs .
Instead , financial institutions should be reviewing each potential member / customer individually , as well as occasionally check on their locations and where loans are originating from to be sure no communities are left in the dark . What matters most is the pattern . Is there a systemic avoidance of certain neighborhoods at a financial institution ? Are there patterns of only lending to wealthier white people ? Can these patterns be backed up and explained by non-illegal reasons , or are they simply due to inadvertent discrimination ?
As an example of what to avoid , consider the Trident complaint . The complaint details how Trident engaged in a “ pattern or practice of unlawful discrimination against applicants and prospective applicants .” Some of the more egregious acts were as follows :
The Office Locations and Loan Officers Were Concentrated in Majority-White Neighborhoods
Trident had no branches operated or owned on their own , but did consistently rent out real estate offices from another company , Fox & Roach . Out of 53 total locations , 51 of those offices were located in majoritywhite neighborhoods . Although 29 % of the census tracts in the Philadelphia Metropolitan Statistical Area ( MSA ) are majority-minority neighborhoods , only two offices were located in these areas . The census tracts indicated 17 % were high-minority , yet had zero Trident offices — about 50 % of this population were not represented .
Additionally , the offices in the majority-white neighborhoods had mortgage loan inquiries and applications prominently displayed on their websites , but were not included on the websites of the majorityminority offices .
Trident loan officers were assigned to different office locations , without training or additional directive on branching out to areas where there were less or no Trident offices . The loan officers hired were also majority-white , with 64 out of 68 total officers being white . The assistant loan officers from 2015 through 2019 were 90 % white as well , with only one African American , one Pacific Islander , one Hispanic and one Arab American . New loan officers were primarily hired through word-of-mouth and recommendations from the existing white officers only . Trident made no efforts to expand hiring to other areas and maintained no formal policies or procedures for recruiting .
Marketing Only Targeted Majority-White Neighborhoods and Avoided Majority-Minority Neighborhoods
From 2015 through 2019 , Trident ’ s main marketing campaign was done through “ relationships ” via the real estate agents of the company who owned the offices Trident was renting . Marketing materials were often spread through these relationships with real estate agents and distributed at open houses and in offices — most of which were in majoritywhite areas . Online listings for open houses were also overwhelmingly located in these areas . On the other hand , majority-minority areas saw almost no marketing or outreach , despite making up about 50 % of the census tracts Trident ’ s presence covered .
Although direct mailing is not one of Trident ’ s main marketing campaigns , almost all of the individuals on the flyers were white , both models and employees — which would have discouraged applicants from majority-minority neighborhoods . The demographics of the online marketing were much the same . Although all employees were featured on the website , the targeted marketing for applicants featured a majority-white cast .
Lending Staff was Found to be Exchanging Racist or Discriminatory Emails
The CFPB and DOJ found copies of emails sent and received by Trident staff from at least 2016 through 2018 containing racial slurs and racist content , including content involving and making light of derogatory stereotypes .
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