USAO Reaches $1.9 Million Agreement with Bank to Resolve Lending Discrimination Claims

On January 17, 2024, the United States Attorney’s Office for the Western District of Tennessee (“USAO”) announced that it entered into a consent agreement with a full-service bank, resolving allegations of lending discrimination in violation of the Fair Housing Act (“FHA”), 42 U.S.C. §§ 3601–3619 and the Equal Credit Opportunity Act (“ECOA”), 15 U.S.C. §§ 1691–169.

The complaint alleged that the bank failed to provide mortgage services to majority-Black and Hispanic neighborhoods in Memphis from 2015 through at least 2020, and discouraged individuals in those communities who sought credit from obtaining home loans. The bank allegedly received 3.5 times less applications comparatively in majority-Black and Hispanic neighborhoods. And, the applications that were generated from those neighborhoods were disproportionally white.

The bank complied with the USAO investigation and assisted in resolving the redlining allegations. Under the proposed consent order, which was filed simultaneously with the complaint, the bank will invest $1.9 million towards increasing credit opportunities for communities of color in Memphis by creating a loan subsidy fund, investing in advertising, outreach, consumer financial education, credit counseling and community partnerships, and employing mortgage loan officers and a Director of Community Lending dedicated to serving the affected communities.