Tennessee-based neighborhood bank Patriot Bank consented to pay $1.9 million to solve accusations from the Department of Justice (DOJ) that it took part in redlining inequitable practices.
The DOJ declared that from 2015 through a minimum of 2020, Patriot prevented offering home loan services to bulk- Black and Hispanic areas in Memphis, Tennessee and prevented individuals looking for credit in those neighborhoods from acquiring mortgage.
Over the very same six-year duration, other banks got almost 3.5 times as numerous loan applications compared to Patriot in majority-Black and Hispanic areas in Memphis, Tennessee according to its grievance submitted in the U.S. District Court Western District of Tennessee Western Department in January.
Even when Patriot produced loan applications from majority-Black and Hispanic locations, the candidates themselves were disproportionately white, district attorneys declared.
Patriot Bank rejected any accusations of redlining.
” Patriot Bank has actually constantly acted to serve the home mortgage credit requires in minority areas, and the bank’s strong record promotes itself and flatly opposes any accusation of misbehavior,” John Smith, president and CEO of Patriot Bank, in a declaration.
” We take pride in our record and highly reject that Patriot Bank ever prevented stemming home mortgage loans in Black and Hispanic locations of the Memphis market.”
The bank declares that Patriot ranked 14th out of 482 loan providers in making mortgage in minority locations of Memphis in 2021 and 15th out of 534 loan providers in 2022.
Patriot Bank included: “The bank participated in a permission order with the DOJ since the regards to the arrangement affirm and embrace the programs and actions that the bank has actually currently been carrying out by itself for several years to assist fulfill home loan credit requires in the neighborhoods it serves, including its financial investment of $1.9 million in reaching and serving neighborhoods of color, as the permission order itself states.”
Of the $1.9 million financial investment Patriot will make, based on court approval,
- A minimum of $1.3 million will go towards loan aid fund to increase access to home mortgage, home enhancement and home re-finance for locals of majority-Black and Hispanic areas
- About $375,000 will be designated for marketing, outreach, customer monetary education and credit therapy concentrated on majority-Black and Hispanic areas
- Some $250,000 will be invested in neighborhood collaborations to supply services that increase domestic home loan credit gain access to for locals of those areas.
In addition, Patriot Bank is needed to have at least 2 mortgage officers to serve majority-Black and Hispanic areas in the Bank’s service location and utilize a director of neighborhood financing– accountable for advancement of financing in neighborhoods of color.
” The Justice Department is committed to marking out inequitable financing practices throughout this nation and we are strongly devoted to holding loan providers liable, no matter their size. This settlement will supply numerous Memphis households with access to credit that will enhance the quality of their lives while opening chances to construct intergenerational wealth,” stated assistant chief law officer Kristen Clarke of the DOJ’s civil liberties department.
Home mortgage tech platform Modex reveals that Patriot Bank produced about $149 million in mortgage over the last 12 months through 17 active loan officers and 9 branches.
Patriot Bank is the 11th lending institution to reach a settlement with the DOJ over redlining inequitable practices.
In October 2021, the DOJ introduced an effort to fight redlining— a collaborated enforcement effort to resolve this consistent type of discrimination versus neighborhoods of color.
Considering That 2021, the department has actually protected more than $ 109 million in relief for neighborhoods of color that have actually been the victims of providing discrimination throughout the nation.