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Patriot Bank, Lending Discrimination, Tennessee 2023
Patriot Bank, a Memphis-based lender, has agreed to pay a hefty $1.9 million fine to resolve allegations of lending discrimination in majority-Black and Hispanic neighborhoods, the Grimy Times has learned.
The Justice Department announced the agreement, which alleges that Patriot Bank engaged in a pattern of redlining, an illegal practice where lenders avoid providing credit services to communities of color due to the race, color, or national origin of the residents.
“This settlement embodies Dr. Martin Luther King Jr.’s commitment to promoting economic justice and ensuring that Black Americans and all communities of color are able to achieve the American dream, and equally access credit to purchase a home,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division.
According to the allegations, from 2015 through at least 2020, Patriot Bank avoided providing mortgage services to majority-Black and Hispanic neighborhoods in Memphis and discouraged people seeking credit in those communities from obtaining home loans. Over the same six-year period, other banks received nearly 3.5 times as many loan applications compared to Patriot in majority-Black and Hispanic neighborhoods in Memphis.
Patriot Bank will spend $1.3 million on a loan subsidy fund to increase access to home mortgage, home improvement, and home refinance for residents of majority-Black and Hispanic neighborhoods. An additional $375,000 will be spent on advertising, outreach, consumer financial education, and credit counseling focused on majority-Black and Hispanic neighborhoods.
The bank will also spend $225,000 on community partnerships to provide services that increase residential mortgage credit access for residents of those neighborhoods. Furthermore, Patriot Bank will dedicate at least two mortgage loan officers to serving majority-Black and Hispanic neighborhoods in the bank’s service area and employ a Director of Community Lending to oversee the continued development of lending in communities of color.
The investigation into Patriot Bank was launched after receiving a referral from the bank’s regulator, the Board of Governors of the Federal Reserve System. Patriot Bank cooperated with the investigation and worked with the Justice Department to resolve the redlining allegations.
Patriot Bank, Crime: Lending Discrimination, State: Tennessee, Year: 2023
Defendant: Patriot Bank
Criminal Charges: Pattern or practice of lending discrimination by redlining majority-Black and Hispanic neighborhoods in Memphis, Tennessee
City and State: Memphis, Tennessee
Exact Date: The allegations span from 2015 through at least 2020
Sentence or Outcome: $1.9 million fine, increased credit opportunities for communities of color in Memphis
Dollar Amount: $1.9 million fine
Key Facts
- State: Tennessee
- Category: Fraud & Financial Crimes
- Source: DOJ Press Release â†â€â€
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