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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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