On October 15, 2024 the CFPB and DOJ announced they had jointly filed a complaint and consent order against a mortgage company over allegations of racial discrimination in Birmingham, Alabama.
The joint complaint alleged that the company engaged in unlawful discrimination by “redlining majority-Black and high-Black areas in Birmingham” and engaging in acts that would discourage applicants and potential applicants from pursuing an application for credit. The CFPB and DOJ alleged that these acts violated the Equal Credit Opportunity Act, Regulation B, and the Consumer Financial Protection Act of 2010.
The court entered the consent order that requires the company to invest $7 million in a loan subsidy program. Per the consent order, these funds must be used to offer “home purchase, refinance, and home improvement loans on a more affordable basis than otherwise available for certain residential properties located in majority-Black neighborhoods in the Birmingham.” Further, the company must open or acquire a new loan production office in a majority-Black neighborhood in Birmingham as well as make minimum investments of $500,000 on advertising and outreach, $250,000 on partnerships with community-based or governmental organizations, and take other steps to assist with the credit needs of majority-Black neighborhoods in Birmingham. Finally, the court ordered the company to pay a $1.9 million civil money penalty.