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Therefore, the bank didn’ t take action to serve these communities. The three full-service branches in majority- Black and-Hispanic areas were not assigned any loan officers; however, the full-service branches in majority- White neighborhoods had mortgage loan officers who were assigned branch offices and offered mortgage loan services to walk-in consumers.
Fair Lending Compliance
The third allegation in the complaint is the bank failed to monitor its fair lending compliance. Specifically, the complaint notes it did not establish internal governance to oversee fair lending efforts or determine if loans were being generated in majority-Black and-Hispanic neighborhoods until August 2018. In 2018, the bank conducted its first comprehensive internal fair lending risk assessment and incorporated fair lending considerations in its branching decisions and development of new loan products. The CFPB notes August 2018 was months after the OCC initiated a fair lending examination.
Finally, the complaint alleges the bank knew its advertising was ineffective at generating mortgage loan applications from these minority neighborhoods. Between 2014 and 2018, its marketing strategy was focused on developing commercial business and generically emphasized its brand as a reliable community institution. The majority of the print or digital advertising during this time appeared in business-focused publications. These publications included Chamber of Commerce publications distributed in majority-White neighborhoods. The digital and print advertising did not regularly appear in platforms accessible to or targeted at majority-Black and-Hispanic neighborhoods.
Additionally, the order imposes a $ 5 million penalty against the bank, with credit given for the $ 4 million penalty assessed by the OCC. Note, the OCC Consent Order resulting in the $ 4 million penalty states the bank neither admitted nor denied their findings.
What You Need to Know
The DOJ and related Fair Lending Authorities have taken a pledge to work closely with one another to monitor potential unfair practices and ensure credit access.
The Attorney General has vocalized a commitment to making far more robust use of these institutions and authorities to focus resources on ensuring fair access to credit across all neighborhoods in the United States. This includes closer monitoring, additional hearings and the potential for more fines and violations for institutions who are not up-to-date in their practices, that have not been compliant with the FHA, Equal Credit Opportunity Act( ECOA) and the CFPA.
All the related entities will be partnering and strengthening existing relationships for information and outreach. These programs will be responsible for monitoring lending practices, especially in majority-Black and-Hispanic neighborhoods, to determine if the DOJ needs to act against redlining practices. With the addition of state Attorney Generals, investigations can be opened and are more likely be resolved quickly. •••
The proposed consent order filed by the DOJ and CFPB requires the bank to do the following:
• Put $ 3.85 million into a loan subsidy program for impacted neighborhoods
• Increase its lending presence in impacted neighborhoods by opening a new lending office within the Memphis area
• Fund $ 200,000 in targeted advertising per year to generate applications for mortgage loans in these neighborhoods
• Implement proper fair lending procedures
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