DOJ Files Lawsuit Against Minnesota Bank Over Alleged Minority Redlining Practices

DOJ  •  ECOA  •  FHA  •  Mortgage

On January 13, 2017, the Department of Justice (“DOJ”) announced that it had filed a lawsuit against a Minnesota bank, stemming from allegations that the bank engaged in illegal “redlining” of minority neighborhoods in the Minneapolis-St. Paul metropolitan area.

The DOJ alleged in its complaint that the bank violated the Fair Housing Act, 42 U.S.C. §§ 3601-3619, and the Equal Credit Opportunity Act, 15 U.S.C. §§ 1691-169, both of which prohibit race discrimination in mortgage lending practices.  According to the DOJ, the bank engaged in several unlawful “redlining” practices through which lenders denied or avoided providing credit services in minority neighborhoods.

Specifically, the DOJ alleged that, from at least 2010 to 2015, the Minnesota bank had excluded majority-minority neighborhoods from its service area and had operated no branch offices in those neighborhoods.  The DOJ also claimed that of the nearly 4,400 residential mortgages originated by the bank during this five-year period, only 1.16% of those residential loans concerned property in majority-minority areas – compared to the 5.15% originated by comparable lenders.

As remedies, the DOJ requests injunctive relief, unspecified civil penalties, and an award of monetary damages for the injuries of all victims of the bank’s discriminatory practices.

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