branches in neighborhoods that are majority-Black and -Hispanic or assigning loan officers to only majority-White neighborhood branches . Unfair lending practices can also become more complex , especially when the institution lacks internal resources to detect compliance issues .
Cadence Bank
The Aug . 20 , 2021 , complaint alleges between 2013- 2017 , Cadence Bank avoided providing home loans and other home mortgage services in majority-Black and -Hispanic neighborhoods in Houston , Texas . Some of the allegations include :
• Maintaining almost all its branches and loan officers in majority-White neighborhoods .
• Concentrating its outreach , advertising and marketing in majority-White areas , and avoiding majority- Black and -Hispanic areas . Cadence Bank ’ s main advertising and marketing technique was through loan officers getting referrals from developers and real estate agents in the surrounding areas . The bank did not train or assist their loan officers in looking for referrals from minority neighborhoods .
• Overlooking or simply not hiring any loan officer with ties and relationships to these neighborhoods . It also did not hire anyone who could speak Spanish to provide credit services to the people in these areas .
Due to these practices , Cadence Bank had a disproportionately low number of loan applications from majority-Black and -Hispanic neighborhoods . None of these practices served a necessary , substantial , legitimate and non-discriminatory purpose . The bank was then enjoined from future violations and ordered to :
• Train staff on the Federal Housing Administration ( FHA ) and Consumer Financial Protection Act ( CFPA ).
• Submit a detailed report on their fair lending practices .
Trustmark National Bank
On Oct . 22 , 2021 , the Consumer Financial Protection Bureau ( CFPB ) and DOJ , in cooperation with the Office of the Comptroller of the Currency ( OCC ) took action to end alleged redlining by Trustmark National Bank .
The joint complaint alleges Trustmark National Bank violated the Fair Housing Act ( FHA ), Equal Credit Opportunity Act ( ECOA ) and the Consumer Financial
Protection Act of 2010 ( CFPA ). Additionally , the complaint alleges the bank violated Regulation B , which implements the Equal Credit Opportunity Act . The laws and regulation violated prohibit creditors from discriminating against applicants and prospective applicants in credit transactions based on race , color and national origin .
The alleged redlining occurred in the Memphis metropolitan area , where the bank had 25 branches , between 2014 and 2018 . Per the United States Census Bureau , in 2018 this region was majority-Black and -Hispanic, accounting for 45.8 % and 5 %, respectively .
Low Number of Mortgage Loans
One of the points in the complaint states the bank made a disproportionately low number of mortgage loans in minority neighborhoods in the Memphis metropolitan area . While the bank made 2,369 HMDA-reportable residential mortgage loans in this area , only 8.3 % were made in majority-Black and -Hispanic neighborhoods . However , its similarly situated peers made 42,714 HMDAreportable residential mortgage loans in the same area , with 19 % going to residents of minority neighborhoods . When the disparities were calculated annually during this time period , the bank ’ s peers made loans between 1.65 and 3.35 times that rate . The complaint categorizes this as a “ statistically significant failure by the bank , relative to its peer lenders , to make home loans and provide mortgagee residential mortgage services to residents of , and those seeking credit for properties located in , majority-Black and -Hispanic census tracts in Memphis on a non-discriminatory basis ” during the time period .
Branch Locations
Allegedly the bank avoided locating branches in majority- Black and -Hispanic neighborhoods and assigning loan officers to these neighborhoods . Of their 25 branches in the Memphis area , only four were located in these neighborhoods . Three of those four branches were classified as full-service that accepted residential mortgage loan applications . Only two full-service branches were located in these minority neighborhoods , which were established or acquired when the surrounding neighborhoods were majority-White before shifting demographics .
Continued on page 6
5