HUD Announces Largest Settlement Ever for Mortgage Redlining
On March 26, 2015, the U.S. Department of Housing and Urban Development (HUD) announced a $200 million settlement with Associated Bank, N.A. (Associated) for unfair lending practices against minority borrowers.
Between 2008 and 2010, Associated, based in Wisconsin, engaged in discriminatory lending practices in denying mortgages to Hispanic and African-American applicants and by providing relatively few lending services to predominantly Hispanic and African-American neighborhoods. Compared to other lenders, Associated made relatively fewer loans in parts of metropolitan areas in Illinois, Wisconsin, and Minnesota, with large Hispanic and African-American populations, compared to nearby largely white areas.
In addition to the $200 million settlement, Associated must open four loan production offices in neighborhoods with large Hispanic and African-American populations, offer fair housing training to all its employees and agents with substantial residential lending activity, and maintain a second level review process for all denied residential loans.
CLA’s financial institution regulatory compliance team assists banks and credit unions nationwide in establishing regulatory compliance programs, conducting compliance testing, and training staff on regulations. Justin Robinson is a member of CLA’s regulatory compliance team and can be reached at justin.robinson@CLAconnect.com.
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