By james art Fairway Independent Mortgage Corporation agreed to pay $8 million and an additional $1.9 million civil penalty to resolve allegations of blighting in predominantly black neighborhoods in Birmingham, Alabama.
This settlement is part of the Justice Department’s Anti-Redlining Initiative, which has already provided more than $150 million in aid to communities of color across the country.
Redlining, an illegal practice in which lenders avoid providing credit services based on race, has historically limited financial access and homeownership opportunities in black and minority communities.
“This case is a reminder that red-handedness is not a thing of the past, and the Department of Justice will continue to work with urgency to combat lending discrimination wherever it occurs and to provide relief to communities harmed by it.” , said Attorney General Merrick Garland.
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The Department of Justice, along with the Consumer Financial Protection Bureau (CFPB), accused Fairway of focusing its marketing efforts solely on predominantly white areas.
At the same time, its retail loan offices were similarly located in majority-white neighborhoods. Fairway’s practices allegedly discouraged black residents from applying for loans, with the company making loans in black neighborhoods at a rate far below that of its peers.
As part of the settlement, Fairway agreed to establish a $7 million loan subsidy fund to provide affordable home purchase, refinance and home improvement loans to black residents of Birmingham.
In addition, the company will invest $1 million in programs designed to support this fund, including financial education initiatives and community partnerships to help address the long-term impacts of discriminatory lending.
“This agreement will provide Birmingham’s black neighborhoods with long-denied access to credit and increase opportunities for homeownership and generational wealth,” said Kristen Clark, Assistant Attorney General in the Department of Homeland Security’s Civil Rights Division. justice.
In addition to the financial commitments, Fairway will also open a new loan office in a predominantly black neighborhood in Birmingham and invest heavily in local advertising and outreach programs targeting black communities.
Fairway’s $1.9 million penalty will be paid into the CFPB’s Civil Penalty Fund, which provides restitution to victims of financial violations. “The CFPB and the Department of Justice are holding Fairway accountable for redlining black neighborhoods,” said CFPB Director Rohit Chopra.
Stacey M. Brown is a senior national correspondent for NNPA Newswire. Follow him @StacyBrownMedia
