RSSMississippi’s Trustmark National Bank is settling a case with the Consumer Financial Protection Bureau and the U.S. Department of Justice over redlining allegations in the Memphis area. The consent order would require Trustmark to create a loan subsidy program and pay a $5 million fine.
The joint complaint alleges that Trustmark violated the Fair Housing Act, the Equal Credit Opportunity Act and its implementing regulation, Regulation B, and the Consumer Financial Protection Act of 2010. It arose from an examination of the Office of the Comptroller of the Currency that identified potential redlining.
The CFPB and DOJ allege that Trustmark discriminated against Black and Hispanic neighborhoods by deliberately not marketing, offering, or originating home loans to consumers in majority-Black and Hispanic neighborhoods in the Memphis metropolitan area. From 2014-2018, only four of the bank’s 25 branches were in majority-Black and Hispanic communities, although 50 percent of the census tracts in the Memphis MSA have a majority of Black and Hispanic residents. It did not assign any mortgage loan officers to those branches, the complaint said, severely limiting its mortgage marketing and outreach to Black and Hispanic residents.
The agencies also allege that Trustmark failed to monitor its fair lending compliance and discouraged consumers residing in or seeking credit for properties located in these neighborhoods from applying for credit.
If entered by the court, the settlement would require Trustmark to put $3.85 million into a loan subsidy program for impacted neighborhoods, increase its lending presence there, and implement proper fair lending procedures. The order would also impose a $5 million civil money penalty against the bank and will credit the $4 million penalty collected by the OCC toward the satisfaction of this amount.
“Trustmark purposely excluded and discriminated against Black and Hispanic communities” said CFPB Director Rohit Chopra. “The federal government will be working to rid the market of racist business practices, including those by discriminatory algorithms.”
Jackson-based Trustmark currently has 196 branches in five southern states, including 22 branches in the Memphis metropolitan area
