A discrimination settlement being made by a bank-holding company comes as lenders digest two other types of recent discrimination settlements.
The Department of Housing and Urban development has been busy pursuing alleged violations of the Fair Housing Act.
At least 14 settlements have recently been reached for more than $2.2 million in cases where lenders allegedly discriminated against applicants on maternity leave.
In addition, a couple who live on a Native American reservation in North Dakota collected nearly $11,500 from U.S. Bank to settle allegations of race discrimination.
Now, HUD has reached a settlement with Midland States Bancorp Inc.
A conciliation agreement resolves a complaint filed with HUD against the Effingham, Ill.-based company by the Metropolitan St. Louis Equal Housing and Opportunity Council.
The settlement comes as mortgage lenders are weary from implementing a host of new rules, including the Qualified Mortgage Rule, and wary of being accused of discrimination.
Midland, which is the parent of Midland States Bank, allegedly avoided doing business in St. Louis’ predominantly black and Hispanic neighborhoods.
“Metropolitan St. Louis Equal Housing and Opportunity Council’s complaint alleged that the bank delineated its service area in a discriminatory manner that excluded areas of high minority concentration, a practice known as redlining,” HUD stated. “EHOC’s complaint also alleged that the bank located branches in a manner that did not give equal access to customers based on race and national origin, and failed to market residential real estate loans in African American and Hispanic communities.”
In addition to paying $200,000 to the council, Midland States agreed to originate $8 million in loans secured by properties in majority-minority neighborhoods during the next three years.
It also will need to establish a $550,000 subsidy fund to provide discounted purchase financing or refinancing in majority-minority markets in St. Louis, Central Illinois and Northern Illinois over the next three years.
Another requirement is the origination of $3 million in home repair loans in majority-minority census tracts and the establishment of a $400,000 subsidy fund for affordable home repair loans for homeowners who experienced financial distress and deferred maintenance on their properties
Midland must additionally originate at least $4 million in multifamily loans in the minority areas over three years.
Midland is opening a full-service branch in Joliet, Ill.; a loan production branch in St. Louis; and, tentatively, a full service branch in St. Louis — all in majority-minority census tracts.
