USDOJ, Michigan Lenders Settle Race-Based "Redlining" Allegations In Detroit-Area Fair Housing, ECOA Lawsuit

In Detroit, Michigan, Thomson Reuters reports:

• On May 5, 2011, the Department of Justice (DOJ) announced that it had reached a settlement with Citizens Republic Bancorp Inc. (CRBC) and Citizens Bank of Flint, Michigan in a lawsuit alleging a pattern or practice of lending discrimination or “redlining” in Detroit in violation of the Fair Housing Act (FHA) and the Equal Credit Opportunity Act (ECOA).
• The lawsuit filed by the Justice Department alleged that CRBC, as the successor to Republic Bank, and Citizens Bank violated the FHA and ECOA, which prohibit discrimination on the basis of race and color in a lending institution’s mortgage lending practices, by serving the credit needs of the residents of predominantly white neighborhoods in the Detroit metropolitan area to a significantly greater extent than the credit needs of majority African-American neighborhoods. Detroit has long had highly segregated residential housing patterns, especially for African-Americans.
• The DOJ alleged that the lenders’ lending footprint “formed a virtual horseshoe around and excluded most majority-black census tracts in the City of Detroit,” and that the lenders obtained “significantly” fewer applications from majority-black areas than from majority white areas.(1)

For more, see Jonathan W. Cannon on Detroit lending discrimination settlement.

(1) For more from the U.S. Department of Justice:

• Press Release: Justice Department Reaches Settlement with Citizens Republic Bancorp Inc. and Citizens Bank Regarding Alleged Lending Discrimination in Detroit (Settlement Provides $3.6 Million to Ensure Equal Lending Services to African-American Community);
• Lawsuit: United States v. Citizens Republic Bancorp, Inc. and Citizens Bank;
• Proposed Settlement Agreement/Agreed Order.