U.S. Justice Dept launches new discriminatory lending initiative
WASHINGTON, Oct 22 (Reuters) – The U.S. Department of Justice is launching a nationwide initiative to fight discriminatory lending practices, Attorney General Merrick Garland mentioned on Friday.
Garland mentioned the unlawful follow of “redlining,” or avoiding lending to minority neighborhoods, remained a persistent drawback, and the federal authorities was devoted extra sources to figuring out it and punishing lenders.
“Today, we are committing ourselves to addressing modern-day redlining by making far more robust use of our fair lending authorities,” he mentioned. The new initiative will sort out truthful lending points “on a broader geographic scale than the Justice Department has ever done before,” he added.
Specifically, Garland mentioned authorities nationwide are partnering with banking and client regulators, together with the Consumer Financial Protection Bureau and Office of the Comptroller of the Currency, which screens nationwide banks.
The authorities already has a number of truthful lending probes open, and expects extra to come back shortly, he mentioned.
Garland additionally introduced the primary settlement below the initiative, of $8.85 million, with Tennessee’s TrustMark National Bank, which the federal government mentioned prevented providing residence loans in predominantly Black and Hispanic neighborhoods.
Officials mentioned they might deal with fashionable methods lenders might discriminate in opposition to debtors. Rohit Chopra, director of the Consumer Financial Protection Bureau, singled out “digital redlining disguised through so-called neutral algorithms.”
“Algorithms can help remove bias, but black box underwriting decisions are not necessarily creating a more level playing field,” he mentioned on the announcement. “We will not allow robo-discrimination to proliferate.”