BancorpSouth pays $10.6 million for mortgage practices

A CFPB press release and blog article have announced a joint action by the Bureau and the Department of Justice (DOJ) against BancorpSouth Bank for discriminatory mortgage lending practices that harmed African Americans and other minorities. The complaint filed by the CFPB and DOJ alleges that BancorpSouth engaged in numerous discriminatory practices, including illegally redlining in Memphis; denying certain African Americans mortgage loans more often than similarly situated non-Hispanic white applicants; charging African-American customers more for certain mortgage loans than it charged non-Hispanic white borrowers with similar loan qualifications; and implementing an explicitly discriminatory loan denial policy. A consent order, which is subject to court approval, would require BancorpSouth to take a number of remedial measures. Among other things, the order would require BancorpSouth to:

• Revise its policies to prevent discrimination in the future
• Provide fair lending training to its employees, including training on implicit racial bias
• Pay $4 million to subsidize mortgage loans in the minority neighborhoods in the Memphis area that were allegedly redlined
• Open a new branch or loan production office in a high-minority neighborhood in the Memphis area
• Invest $500,000 to partner with community-based organizations that provide education, credit repair, and other assistance in minority neighborhoods in the Memphis area
• Spend $100,000 per year during the term of the order on advertising in minority neighborhoods in the Memphis area
• Pay $2.78 million to African-American consumers who were unlawfully denied loans or overcharged for their loans
• Offer subsidized credit to African-American consumers who were wrongfully denied loans, and
• Pay a $3.03 million penalty.