Department of Justice Announces Action to Resolve Lending Discrimination Complaints Against Evolve Bank and Trust | Takeover bid
The Department of Justice today announced it has secured an agreement to resolve allegations that Memphis-headquartered Evolve Bank & Trust engaged in lending discrimination based on race, gender and national origin in pricing its residential mortgages from at least 2014 to 2019.
Evolve Bank has mortgage offices and provides mortgage services in 15 states across the country. As part of the department’s settlement, which is subject to district court approval, Evolve Bank will establish a $1.3 million settlement fund to compensate affected borrowers. Evolve Bank will also pay a civil penalty of $50,000.
“This settlement will provide deserved relief to thousands of borrowers who have experienced discrimination as a result of Evolve Bank’s pricing policies,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “This case marks the latest step for the Justice Department to protect Americans from illegal lending practices and shows that we will hold lenders accountable for the effects of their discriminatory practices.”
“This settlement provides some measure of justice to those who have been harmed by Evolve Bank’s discriminatory actions,” said U.S. Attorney Kevin G. Ritz for the Western District of Tennessee. “I also hope this sends a strong message to banks and other lenders that the Department of Justice will not tolerate illegal barriers in residential mortgage lending. It is high time that these practices stop.
The department opened its investigation after the Federal Reserve Board of Governors dismissed the case. In accordance with federal law, the Council has long referred cases involving potential fair lending violations to the Department of Justice.
According to the complaint, the Justice Department alleges that Evolve Bank violated the Fair Housing Act and the Equal Credit Opportunity Act, which prohibit financial institutions from discriminating on the basis of race. , gender or national origin in their mortgage services. Specifically, the complaint alleges that, from at least 2014 to 2019, Evolve Bank’s loan pricing practices caused Black, Hispanic and female borrowers to pay more in the “discretionary pricing” components. home loans than white or male borrowers for reasons unrelated to their creditworthiness. . “Discretionary Pricing” means those portions of a loan price that are at the discretion of Evolve’s loan officers and managers, including any fees, charges, or rate discounts that are unrelated to the credit qualifications of the borrowers or the characteristics of the loan.
Since being made aware of the department’s investigation into this matter, Evolve has taken steps to revise its policies and practices that have resulted in black, Hispanic and female borrowers paying more for home loans than white or white borrowers. masculine. During the four-year term of the proposed consent order, Evolve will maintain policies that reduce loan officer discretion, employ a fair loan officer who will work in close consultation with bank management, and provide fair training. to its staff.
The department’s Civil Rights Division has long been committed to working to make mortgage lending and home ownership available to all Americans on equal terms, regardless of race, gender, or national origin. In January 2021, President Biden reaffirmed the essential role of the federal government in addressing the legacy of segregation and discrimination in housing, stating that this administration’s policy is to eliminate “racial prejudice and other forms of discrimination at all stages of home buying and renting.”
Enforcement of fair lending laws by the Department of Justice is conducted by the Housing and Civil Law Enforcement Section of the Civil Rights Division. Additional information on Fair Enforcement of Section loans is available on the Department of Justice webpage. Individuals can report loan discrimination by calling the Department of Justice’s Housing Discrimination Hotline at 1-833-591-0291 or by submitting a report online.