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Patriot Bank, Exclusionary Lending, Tennessee 2023
Grimy Times Investigates
Patriot Bank, a Tennessee-based financial institution, has agreed to pay $1.9 million to settle allegations of discriminatory lending practices in Memphis. The accusations, brought forth by the U.S. government, claim that Patriot Bank engaged in a pattern or practice of exclusionary lending, specifically targeting low-income communities of color.
According to the allegations, since 2015, Patriot Bank avoided providing mortgage services to predominantly black and Hispanic neighborhoods in Memphis, thereby denying these communities access to credit. The bank allegedly also discouraged individuals from seeking loans in these areas, resulting in a disproportionate number of white borrowers receiving mortgage loans.
U.S. Assistant Attorney General Kristen Clarke stated, ‘This settlement embodies Dr. Martin Luther King, Jr.’s commitment to promoting economic justice and ensuring that African Americans and all communities of color can achieve the American Dream and have equal access to credit to purchase a home.’
U.S. Attorney for the Western District of Tennessee Kevin G. Ritz added, ‘For too long, practices like exclusionary lending and discriminatory lending have undermined the promises of our economic system.’ The bank’s actions, according to the government, were a deliberate attempt to deny communities of color equal access to credit and opportunities.
As part of the settlement, Patriot Bank will invest $1.9 million to increase credit opportunities for communities of color in Memphis. Specifically, the bank will:
– Invest at least $1.3 million in a loan subsidy fund to increase access to mortgage loans, home improvements, and refinancing for residents of predominantly black and Hispanic neighborhoods;
– Spend $375,000 on advertising, community outreach, consumer financial education, and credit counseling targeted at predominantly black and Hispanic neighborhoods;
– Allocate $225,000 to community organizations to provide services that increase access to residential mortgage credit for residents of those neighborhoods;
– Ensure that at least two mortgage originators are dedicated to serving predominantly black and Hispanic neighborhoods in the bank’s service area;
– Employ a Community Lending Director to oversee the continued development of loans in communities of color;
– Conduct ongoing monitoring and evaluation to ensure compliance with the settlement terms.
Key Facts
- State: Tennessee
- Category: Fraud & Financial Crimes
- Source: DOJ Press Release â†â€â€
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