Washington – The Justice Department announced on Friday an intergovernmental effort to investigate and prosecute redlining, racial minorities or banking practices that discriminate against certain neighborhoods. This is the first major expansion of the Redlining Survey since the Obama administration.
As part of that effort, the Department of Justice, the Consumer Financial Protection Bureau, and the Office of the Comptroller of the Currency have also issued a new proceeding against Trustmark Bank for dealing with black and Hispanic borrowers in Memphis, Tennessee.
Despite half a century of law designed to combat redlining, racist practices continue nationwide and long-term implications are still felt today. The average net worth of a black family is only a small part of a typical white household, and homes found in historically redlining areas are still less valuable than homes found in non-redlining communities.
“Discriminatory lending goes against the basic promises of our economic system,” Attorney General Merrick Garland said in a prepared statement. “If credit is denied because of race or country of origin, we lose most of our ability to share the prosperity of our country.”
According to Garland, the ministry is currently investigating several redlining cases and expects more to open in the coming months.
“We spare no resources to ensure that federal fair lending laws are strongly enforced and that financial institutions provide all Americans with the opportunity to earn equal credit,” Garland said. I did.
The Department of Justice’s efforts also include CFPB and OCC, two of the US financial regulators most often involved in mortgage lending. Also attended are US law firms and state attorney generals with local experience in these areas.
The agency will also expand its analysis of bank lending activity to look for normal behavior patterns.
While there are still historical cases of redlining where banks exclude certain areas, the Biden administration is focusing an important part of this effort on modern redlining. ..
The CFPB has put a lot of effort into algorithmic redlining, CFPB director Rohit Chopra said Friday.
“Digital redlining can simply take root in old forms of discrimination,” he said.
The Trump administration has largely evaded federal efforts to investigate the Redlining case. The Trump administration filed its first redlining case in 2018 — almost two years in the administration’s term — and a major dismantling of the civil rights sector run by Banita Puta, who sought to expand the redlining investigation under the Obama administration. Did.
The Department of Justice, the CFPB, and the OCC reached a settlement with the Trustmark National Bank on Friday, ending allegations that the banks were redlining specific areas of Memphis.
With $ 13 billion in assets, Trustmark, a bank primarily in the south, will open mortgage offices in redlining areas and create loan subsidies for borrowers in these discriminated areas. You need to donate $ 3.85 million to the fund. Banks will also pay the CFPB a $ 5 million fine and the OCC a $ 4 million fine.
In a statement, Trustmark’s president and chief executive officer, Duein Dewey, said the bank had fully cooperated with the Justice Department’s investigation to “avoid distracting protracted proceedings.” Discriminatory activity occurred at least between 2014 and 2016, and banks have made efforts to revise these practices, he said.
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Department of Justice Expands Redlining Investigation Initiatives
Source link Department of Justice Expands Redlining Investigation Initiatives