First-Citizens Bank & Trust Company has settled charges that manually underwritten white borrowers were denied less for mortgages than their non-white counterparts.
A Department of Housing and Urban Development analysis in 2010 of First Citizens’ Home Mortgage Disclosure Act data prompted a complaint filed in 2012.
On applications that were denied by automated underwriting systems, the subsequent manual underwriting provided loan approvals more often for white applicants.
HUD alleges that black, Latino and Asian-American applicants were denied more in the manual process than whites.
The alleged activities took place at the retail arm of South Carolina-based First Citizens Bank and Trust Co. The bank was merged in January 2015 into respondent and successor
First-Citizens Bank & Trust Company, which is chartered in North Carolina.
“As the successor, First-Citizens Bank & Trust Company continued to cooperate with HUD throughout this investigation and ultimate resolution announced today,” HUD said.
First-Citizens has
agreed to take several steps to ensure and protect equal access to credit for applicants in South Carolina– including making $140,000 available to nonprofit organizations that provide credit and housing counseling, financial literacy training and related programs to first-time homebuyers.
Another $20,000 will be spent on affirmative marketing,
advertising and outreach to residents in majority-minority census tracts.
Additionally, HUD said the company would adopt
a new standardized and objective set of guidelines for a second review of retail applications initially denied by the AUS.
First-Citizens will require retail-channel employees to attend fair housing training and hire three market specialists to focus on diverse lending in multiple targeted locations.
The conciliation agreement requires it to partner
with non-profit or community groups to conduct at least 24 financial education programs.
