Category: Lending Discrimination

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CFPB Issues Third Fair Lending Report to Congress

On April 28, 2015, the Consumer Financial Protection Bureau (“CFPB”) released its third Fair Lending Report to Congress.  The report summarizes the CFPB’s fair lending activities during the 2014 calendar year.  The report largely focuses on the efforts of the CFPB’s Office of Fair Lending, which according to Director Cordray’s comments in the report “provides oversight and enforcement of … Continue Reading

NY Attorney General Accuses Mortgage Lender of Redlining

On September 2, 2014, the New York attorney general filed a lawsuit alleging that a regional bank engaged in unlawful discrimination by systemically denying access to mortgage loans through “redlining” Buffalo’s African-American neighborhoods.   According to AG’s complaint, the bank created a “Trade Area” map defining its lending area that included most of the city of Buffalo … Continue Reading

CFPB and DOJ file first joint-agency fair lending case against indirect auto finance company

December 21, 2013 –  The United States Department of Justice and Consumer Financial Protection Bureau announced the filing of their first joint fair lending enforcement action and settlement regarding allegations that an auto finance company’s dealer compensation policy resulted in a disparate impact for certain minority borrowers.  The $98 million settlement announced by the agencies … Continue Reading

DOJ and CFPB reach $35 million settlement in lending discrimination case

December 23, 2013 –  The United States Department of Justice and the Consumer Financial Protection Bureau announced that they have settled allegations that National City Bank engaged in discriminatory lending practices by charging African American and Latino home loan borrowers higher interest rates between 2002 and 2008.  The settlement was filed in the U.S. District Court … Continue Reading


For the second time in the last two years, a settlement will prevent the United States Supreme Court from deciding whether a disparate impact claim may be brought under the Fair Housing Act. According to a National Mortgage News report, on November 13, 2013, the Township of Mount Holly, New Jersey approved a settlement resolving a lawsuit … Continue Reading

DOJ Announces Auto Lending Discrimination Settlement

On September 6, 2013, the Department of Justice’s Civil Rights Division announced it had settled a lawsuit alleging that a now defunct Los Angeles automobile dealership violated the Equal Credit Opportunity Act by charging higher interest rate markups to non-Asian customers in connection with auto loans.  The settlement with Union Auto Sales Inc. includes a $125,000 payment to resolve the … Continue Reading

Supreme Court to Decide Whether Fair Housing Act Allows Disparate Impact Theory

On June 17, 2013, the U.S. Supreme Court agreed to consider whether a Fair Housing Act violation may be established under the disparate impact theory, which focuses on discriminatory effects not discriminatory intent.  In Mount Holly v. Mount Holly Gardens Citizens in Action, the Supreme Court will consider whether a New Jersey township’s plan to … Continue Reading

Justice Department Settles Discrimination Claim Involving Unsecured Loans

On February 19, 2013, the U.S. Department of Justice’s Civil Rights Division announced that it had reached a settlement with Texas Champion Bank to resolve allegations that the bank discriminated against Hispanic borrowers by charging them higher prices for unsecured consumer loans.  Under the agreement, Texas Champion will pay $700,000 in compensation to Hispanic borrowers … Continue Reading

DOJ Settles Another Lending Discrimination Case

On August 28, 2012, the U.S. Department of Justice announced that it had reached a settlement with New York-based GFI Mortgage Bankers Inc. on claims that the lender engaged in discriminatory lending practices.  Under the settlement filed in the Southern District of New York, GFI agreed to pay $3.5 million to settle the claims. The Complaint alleges … Continue Reading

Justice Department Settles Lending Discrimination Suit Against Countrywide

On December 21, 2011 the U.S. Department of Justice announced it had reached a $335 million settlement with Countrywide, now owned by Bank of America, to resolve allegations of lending discrimination.  The settlement resolves claims that Countrywide charged Hispanics and African-American borrowers higher prices for credit compared to similarly situated non-Hispanic and white borrowers.  The Justice Department … Continue Reading

DOJ Settles Redlining Discrimination Allegations

On May 5, 2011, the U.S. Department of Justice announced a $3.6 million settlement with Citizens Republic Bankcorp Inc. (CRBC) to resolve allegations that Republic Bank, acquired by Citizens in 2006,  refused to lend in predominately minority areas of Detroit in violation of the Fair Housing Act and the Equal Credit Opportunity Act.  The Complaint alleges that CRBC engaged in "redlining" by serving … Continue Reading

US DOJ Settles Lending Discrimination Case

On December 8, 2010, the Justice Department’s Civil Rights Division announced in a press release that it had reached a $2 million settlement with Texas-based PrimeLending to resolve allegations that the lender engaged in a pattern or practice of discrimination against African-American borrowers between 2006 and 2009.  The Complaint includes allegations that the lender’s policy … Continue Reading

DOJ Announces Results of Financial Fraud Task Force’s “Operation Broken Trust”

On December 6, 2010, Attorney General Eric Holder announced the results of "Operation Broken Trust," a nationwide law enforcement effort formed by the Financial Fraud Enforcement Task Force to investigate investment fraud.  Holder said in a press release: With this operation, the Financial Fraud Enforcement Task Force is sending a strong message.   To the public: be … Continue Reading

US DOJ Investigating Lending Discrimination Against Native Americans

In a November 30, 2010 speech at the 2010 District of New Mexico Tribal Consultation conference, Thomas Perez , the Assistant Attorney General for the Civil Rights Division, confirmed that his Division is pursuing "several investigations" into potential lending discrimination against Native Americans. [W]e know that minority communities were hit particularly hard in the foreclosure crisis, … Continue Reading

Illinois AG Sues Countrywide, Alleges Lending Discrimination

The Associated Press reports that Illinois Attorney General Lisa Madigan has sued Countrywide Home Loans, alleging the company discriminated against African American and Latino borrowers in Illinois between 2005 and 2007.  The complaint includes allegations that Countrywide charged African American and Latino borrowers higher rates and fees compared to similarly situated white borrowers.   The complaint states that Countrywide engaged … Continue Reading

AAG Perez Reiterates DOJ’s Emphasis on Lending Discrimination Enforcement

Speaking at a June 23, 2010 Brookings conference, the Department of Justice’s Assistant Attorney General for the Civil Rights Division made clear that investigating and prosecuting lending discrimination is a top priority for his administration.  As reported on, AAG Thomas Perez reaffirmed the DOJ’s commitment to increased oversight and enforcement of the financial industry, as well as … Continue Reading

DOJ Settles Lending Discrimination Case Against AIG Subsidiaries

The DOJ’s Civil Rights Division announced a $6.1 million settlement with two AIG subsidiaries that the government alleged had engaged in a pattern and practice of lending discriminated against African-Americans.  According to the Wall Street Journal, the government identified approximately 2,500 African-American borrowers that will each receive about $2,300 in compensation under the agreement.  The Justice Department’s settlement resolved its complaint filed … Continue Reading

U.S. Department of Justice Forms Lending Discrimination Task Force

The New York Times reports that the Department of Justice’s Civil Rights Division has formed a Lending Discrimination unit devoted to investigating and prosecuting unfair lending practices.  According to Assistant Attorney General Tom Perez, the new unit  will look "at any and every practice in the industry,”   Under the DOJ’s most recent budget, the Lending Discrimination … Continue Reading

DOJ Settles Lending Discrimination Case Against Alabama Bank

United Security Bancshares Inc., Thomasville, Ala., entered into a settlement agreement with the Department of Justice’s Civil Rights Division to resolve allegations that its subsidiary First United Security Bank violated the Fair Housing Act and the Equal Credit Opportunity Act when dealing with African-American borrowers.  According the the Justice Department’s press release, the Complaint alleged that … Continue Reading

GAO Report Finds Bank Regulators Not Effectively Enforcing Fair Lending Laws

A new analysis by the General Accountability Office (GAO) found that the existing fair lending enforcement efforts by bank regulators are not working. In the GAO’s Fair Lending report noted that regulators have a fragmented enforcement mechanism that impairs effective fair lending enforcement.  The study also detailed deficiencies in the mortgage data currently made available through the … Continue Reading

Supreme Court Decides Preemption — States Can Probe National Banks

In a highly anticipated decision, a divided U.S. Supreme Court  authorized states to investigate national banks for lending discrimination, thus rejecting the OCC’s position that its regulatory authority preempted states’ enforcement powers.   In the 5-4 opinion authored by Justice Scalia, the high court in Cuomo v. Clearing House Association, LLC held that federal banking regulations did not pre-empt states from enforcing … Continue Reading

Attorney General Holder Commits to Fighting Lending Discrimination, Mortgage Fraud

On June 17, 2009, Attorney General Eric Holder testified before the United States Senate Committee on the Judiciary regarding the U.S. Department of Justice’s recent accomplishments and current priorities.  In his statement, Holder made clear that prosecuting mortgage fraud and other financial crimes will continue as a top Department priority.  In addition, he emphasized the … Continue Reading