The National Community Reinvestment Coalition (NCRC) on Wednesday applauded a $24 million settlement to punish serious intentional discrimination and redlining in the Philadelphia area, and urged the courts to endorse disciplinary action against Berkshire-Hathaway subsidiary Trident Mortgage Company proposed by the Department of Justice (DOJ) and Consumer Financial Protection Bureau (CFPB).
“Lending discrimination is a serious violation of people’s rights and the government is right to punish these ugly and brazen abuses. I commend the DOJ and CFPB for reminding everyone in the mortgage industry that redlining is illegal, and showing the country that our government will act to punish businesses that forget that simple fact,” NCRC President and CEO Jesse Van Tol said. “Trident’s conduct in this case was egregious: Loan officers sending racist emails about loan-seekers in majority-minority neighborhoods, operating offices only in majority-White neighborhoods throughout an entire metropolitan area, and making clear in marketing materials that the company was only interested in serving White customers. It is only right that Trident’s deep-pocketed owners should pay up.”
The Berkshire Hathaway subsidiary’s agreement with the CFPB and DOJ includes a $4 million fine that will help make victims of lending discrimination whole. It mandates a further $20 million in lending and marketing activity to support home lending in the majority-minority Philadelphia neighborhoods Trident abused for years.
This settlement is part of a joint DOJ-CFPB initiative to combat redlining, first launched in October 2021. Trident’s discriminatory practices were first brought to light in an investigation published by Reveal in 2018.
Spurred by redlining practices’ significant and pernicious effects on the continuing racial homeownership gap and the racial wealth divide, DOJ and the CFPB have ramped up their enforcement efforts to address these impacts. Redlining violates longstanding civil rights laws, including the Fair Housing Act and Equal Credit Opportunity Act. Vigorous enforcement sends a message to banks that such discrimination is impermissible and will be subject to invigorated oversight. NCRC supports and looks forward to ongoing enforcement to combat redlining.