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Justice settles complaint against Evolve Bank & Trust

Memphis, TN
09/29/2022
Fine Amount: 
$50,000
Penalty Type: 
Issued by: 

The Department of Justice, on September 29, 2022, issued a proposed Consent Settlement Order against Evolve Bank and Trust, Memphis, Tennessee, that would resolve all federal claims filed in a Complaint alleging that the bank engaged in a pattern or practice of lending discrimination in violation of the Fair Housing Act (“FHA”) and the Equal Credit Opportunity Act (“ECOA”), and Regulation B by discriminating on the basis of race, sex, and national origin in the pricing of residential mortgage loans.

Specifically, the DOJ alleged that from at least 2014 through 2019, Evolve charged Black, Hispanic, and individual female borrowers statistically significant higher amounts in discretionary pricing components than non-Hispanic white and individual male borrowers, resulting in Black and Hispanic borrowers paying more for their mortgage loans than similarly-situated white borrowers, and individual female borrowers paying more than similarly-situated male borrowers. The case had been referred to Justice in 2019 by the Federal Reserve Board.

The Bank maintains that its annual testing of mortgage loan pricing during the 2014 through 2019 time period, which was consistent with accepted industry standards, showed no pattern or practice of statistically significant disparities in the controlled Annual Percentage Rates (“APR”) for African-American, Hispanic, or individual female borrowers that would constitute a violation of the ECOA or FHA.

Under the department’s settlement, which is subject to the approval of the U.S. District Court for the Western District of Tennessee, Evolve Bank will establish a settlement fund of $1.3 million to compensate affected borrowers. Evolve Bank will also pay a $50,000 civil penalty.

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