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CFPB And DOJ Reach $24.4 Settlement With Mortgage Originator For Alleged Lending Discrimination – Financial Services

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On July 27, 2022, the Consumer Financial Protection Bureau
(CFPB) and U.S. Department of Justice (DOJ) announced that they reached a settlement with
a nonbank residential mortgage lender to resolve allegations of
race-based lending discrimination in violation of the Fair Housing
Act (FHA), 42 U.S.C. §§ 3601-3619; the Equal Credit
Opportunity Act (ECOA), 15 U.S.C. §§ 1691-1691f, and its
implementing regulation (Regulation B), 12 C.F.R. pt. 1002; and the
Consumer Financial Protection Act (CFPA), 12 U.S.C. §

According to the agencies’ complaint, the lender allegedly engaged in
unlawful redlining when it “avoided providing home loans and
other home mortgage services in majority-minority neighborhoods in
the Philadelphia [Metropolitan Statistical Area (MSA)].” The
lenders allegedly did so by locating all of its offices and loan
officers in majority-white neighborhoods, concentrating its
marketing efforts exclusively in majority-white neighborhoods, and
distributing internal communications to its employees with racist
language and messages about certain majority-minority

If entered by the United States District Court for the Eastern
District of Pennsylvania, the lender will pay $20.4 million towards
various programs to assist with revitalization efforts in
minority-majority neighborhoods located in the Philadelphia MSA,
including a loan subsidy program, minority advertising and
outreach, consumer education services, and community development
partnerships. The proposed consent order also requires the lender to pay
a $4 million civil penalty. As part of the settlement, the lender
neither admits nor denies the allegations in the complaint.

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