Fair Lending

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The Senate Banking Committee recently held a hearing entitled, “Fairness in Financial Services: Racism and Discrimination in Banking.”  The hearing was held to discuss historical and ongoing discrimination in the financial services industry, and the roles of Congress and regulators in addressing these issues.  The witnesses included: Ms. Lisa Rice, President and CEO, National Fair…

We first review the origins of mortgage redlining and discuss the concept of reverse redlining and new theories of redlining.  We then look at a wide range of topics including: the application of redlining enforcement to non-banks; the use of the Equal Credit Opportunity Act and Fair Housing Act to challenge redlining; activity at state…

The National Community Reinvestment Coalition (NCRC) recently filed two complaints against appraisers with the Department of Housing and Urban Development asserting different treatment based on race in violation of the Fair Housing Act. One complaint asserts different service levels based on race, and the other asserts different home valuations based on race, with White individuals…

On October 18, 2022, the Federal Trade Commission (“FTC”) announced a settlement with a Washington, D.C.-area auto dealer, Passport Automotive Group (“Passport”), resolving allegations that it had deceived consumers by adding illegal “junk” fees onto car prices and charging Black and Latino consumers higher financing costs and fees.  Under the terms of the settlement…

Following up on a threat it made back in 2018, the New York State Department of Financial Services (DFS) announced on October 6, 2022 that it entered into a consent order with Rhinebeck Bank (“Rhinebeck”) to settle discrimination claims involving discretionary dealer markups on retail installment contracts with minority borrowers.  Under the settlement, Rhinebeck will…

On September 29, 2022, the Justice Department announced a proposed consent order with Evolve Bank and Trust to resolve allegations of lending discrimination on the basis of race, sex, and national origin in the pricing of its residential mortgage loans from at least 2014 through 2019.

Headquartered in Memphis, Tennessee, Evolve Bank maintains mortgage lending…

On July 28, the Center for Responsible Lender (CRL) issued a new report regarding the “persistent harms of high-cost installment loans,” claiming that such loans come with an “exploitative cost” in fees and interest that far exceed that amount borrowed, often causing irreparable harm to borrowers.  CRL notes that the high-cost small-dollar loan market has…

In a recent blog post the CFPB warned mortgage lenders that “[l]enders that fail to have a clear and consistent method to ensure that borrowers can seek a reconsideration of value risk violating federal law.”

In the blog post the CFPB states the following:

“Accurate appraisals are essential to the integrity of mortgage lending. Overvaluation…

The Justice Department announced that it has entered into an agreement with Lakeland Bank to settle the DOJ’s claims that Lakeland engaged in unlawful redlining in the Newark, New Jersey metropolitan area.  The DOJ’s lawsuit against Lakeland, filed in a New Jersey federal district court, is part of the DOJ’s nationwide “Combating Redlining Initiative…