Consumer Finance Insights
March 1, 2016

HUD Settles Fair Housing Claim with Regional Bank

​​​The U.S. Department of Housing and Urban Development (HUD) announced that it reached an agreement with a regional bank over a disparate treatment fair housing claim. HUD alleged that the bank engaged in racially discriminatory redlining by lending less in the majority-minority neighborhood of the East Side of Kansas City, Missouri. The agreement comes from two complaints filed on October 5, 2015 by local non-profit organizations Metropolitan St. Louis Equal Housing and Opportunity Council (EHOC) and Legal Aid of Western Missouri.  The groups claimed that the bank redlined by designating its service area in a way that excluded areas of high African-American concentration.
Under the settlement, the bank agreed to originate $2.5 million in mortgage loans in majority African-American neighborhoods over three years.  The bank also agreed to other fair lending financial commitments, such as establishing a $105,000 loan pool to rehabilitate blighted homes, $50,000 for marketing and outreach to African-American communities, $30,000 for financial education, and $50,000 to the non-profit organization complainants. Finally, the bank has also committed to maintaining three branches in majority minority census tracts.​

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