DOJ and Federal Regulators Sue Banks for Alleged Redlining Practices
- Fifty percent of the census tract that makes up the Memphis Statistical Area is majority-Black and Hispanic. However,
Both complaints highlight alleged redlining practices that concentrated the majority of bank branches and mortgage loan officers in majority-white areas. These alleged practices resulted in disproportionately low loan applications and loans made in . As a result, the DOJ and federal regulators asked courts in both complaints for monetary damages and civil penalties. Trustmark recently entered a settlement that would require Trustmark to place $3.85 million in a loan subsidy program for the impacted areas, increase their lending presence in the impacted areas, implement proper fair lending procedures, and pay $5 million dollars in civil fines (crediting a $4 million penalty collected by the OCC toward the satisfaction of the civil fine amount). The Cadence and Trustmark complaints are a sign of increased federal focus against alleged redlining practices as the DOJ recently announced a new initiative with federal regulators to combat redlining practices.
About the Author
Justin joined NAFCU as a regulatory compliance counsel in August 2021. As part of the Regulatory Compliance Team, he provides daily compliance assistance to member credit unions on a variety of topics.