DOJ, NC Enter into $13.5M Consent Order with Bank Over Redlining Allegations

A large regional bank recently entered into consent orders with the DOJ and the state of North Carolina to resolve allegations that the bank engaged in redlining by avoiding providing mortgages and related services to Black and Hispanic neighborhoods.

The plaintiffs allege that the bank concentrated nearly all of its branches and loan officers outside of Black and Hispanic neighborhoods, employed an “overwhelmingly white” team of loan officers, and targeted its direct mail and online ads at homes near its branch locations in predominately white neighborhoods. As a result, the plaintiffs allege, consumers in the affected communities of color were discouraged from applying for loans, which constitutes redlining in violation of the Fair Housing Act, ECOA, and state law.

Among the consent orders’ monetary terms is an $11.75 million loan subsidy fund to improve mortgage credit for communities of color, $1 million for local community development partnerships, and an additional $750,000 for outreach and advertising.  Other terms of the consent orders include improvements to the bank’s fair lending compliance program, fair lending training for bank staff, and the opening of several new branches in predominantly Black and Hispanic neighborhoods.

The bank neither admits nor denies any allegations of wrongdoing.