DOJ announces new initiative to fight mortgage discrimination – RISMedia
The Department of Justice (DOJ) announced on October 22 a new initiative to fight what United States Attorney General Merrick Garland calls the “modern day red line,” investigating discriminatory practices by mortgage lenders across the country that exclude people of color in violation of federal laws. law.
The new program Combatting Redlining Initiative-will run through the Division of Housing and civil enforcement of the Civil Rights Division of the Justice Department. It was announced alongside a settlement with Trustmark National Bank, which agreed to pay a $ 5 million fine and invest an additional $ 4.5 million in black and Hispanic neighborhoods in Memphis, Tennessee, after being accused of systematically avoiding these communities in its lending practices.
“Enforcement of our fair loan laws is essential to ensure that banks and lenders provide communities of color equal access to lending opportunities,” said Deputy Attorney General Kristen Clarke for the Civil Rights Division of the United States. Ministry of Justice. “A fair and equal access to mortgage options is the cornerstone on which families and communities can create wealth in our country. We know that the redlining is not a problem of a bygone era but a practice that remains pervasive in the loan industry today. “
Prosecutions and investigations of Connecticut To Indiana To California accused lenders of perpetuating the practice of redlining, which began in the 1930s with the federal government’s refusal to insure mortgages in black neighborhoods and has been taken over by private lenders and other policymakers. These banks often refused to admit wrongdoing, but also agreed to change their lending practices and pay heavy fines.
The new initiative DOJ will seek to further scrutinize these institutions and to detect potential violations of the law, in cooperation with States and financial regulatory agencies, the statement said. It will also put a new emphasis on investigating so-called non-depository lenders, financial institutions that are not considered traditional banks and now handle the majority of mortgages, the DOJ said.
Other resources from the Department of Justice will also be tapped as’ force multipliers to ensure that equitable loan application is informed by local expertise in housing markets and the credit needs of local communities of color. », Indicates the press release.
“We will spare no resources to ensure that federal fair loan laws are rigorously enforced and that financial institutions provide every American with an equal opportunity to obtain credit,” Garland said in a statement.
Jesse Williams is the Associate Online Editor of RISMedia. Send him your ideas for real estate news by email at [email protected].