First Tennessee to pay $1.9 million

The Department of Housing and Urban Development has announced a $1.9 million settlement with Memphis-based First Tennessee Bank (First Tennessee), resolving allegations that the bank discriminated against African-American and Hispanic applicants by denying them mortgage loans and by allegedly failing to place bank branches in minority-concentrated areas. Under the agreement, First Tennessee will establish a $1.5 million subsidy fund to provide interest rate reductions on home mortgages, and down payment or closing cost assistance to qualified borrowers in identified portions of Chattanooga, Knoxville, Memphis and Nashville. In addition, First Tennessee agreed to partner with one or more community-based organizations to provide home repair or other grants to help existing homeowners repair their properties in predominantly minority communities, or partner with one or more community-based organizations to provide credit, financial, homeownership or foreclosure prevention services to residents in the affected areas. Specifically, First Tennessee will contribute $270,000 over three years to support these partnership efforts and an additional $105,000 to fund similar services to be provided directly by the National Community Reinvestment Coalition (NCRC). Finally, the bank will pay $25,000 in damages to the NCRC.