Saturday, January 26, 2013

Michigan Bank Settles Race-Based Home Lending Discrimination Charges With Feds For $165K

In St. Charles, Michigan, MLive reports:

  • A Michigan bank based in Saginaw County will open a loan office in a black Saginaw neighborhood as part of a $165,000 settlement in a racial discrimination lawsuit, the U.S. Justice Department announced.

    The deal, which requires court approval, was announced on Tuesday, Jan. 15, on the same day the DOJ complaint was filed.

    The Justice Department claims that St. Charles-based Community State Bank served the needs of white Saginaw- and Flint-area neighborhoods "to a significantly greater extent than" majority black neighborhoods from 2006 to 2009.

    Documents: Complaint and Settlement

    The FDIC visited the bank in 2010 and referred the case to the DOJ for investigation.

    The bank disputes many of the claims, chief executive Bob Wolak said, but decided to settle to avoid a lengthy court battle.

    Under the settlement, the bank will invest $75,000 in a special financing program to increase the amount of credit the bank extends to majority black neighborhoods in and around Saginaw, $75,000 in partnerships with organizations that provides credit, financial, homeownership, and/or foreclosure prevention services to the residents of these neighborhoods, and $15,000 in outreach that promotes its products and services to potential customers in these neighborhoods.

    The bank also will open a loan production office in a majority black neighborhood of Saginaw and conduct fair lending training for its employees. The agreement also prohibits Community from discriminating on the basis of race in any aspect of a credit transaction.

No comments: