U.S. Department of Justice (DOJ) authorities have stated that Patriot Bank will spend close to $2 million to address claims of loan discrimination against communities of color in Memphis.
Bank representatives stated that they freely consented to work with the DOJ. In order to “resolve allegations that the bank engaged in a pattern of or practice of lending discrimination by redlining majority-Black and Hispanic neighborhoods in Memphis, Tennessee,” the bank will pay $1.9 million as part of the settlement.
Under the Fair Housing Act and the Equal Credit Opportunity Act, Patriot Bank was the target of the DOJ’s initial complaint. These laws forbid discrimination based on race or color when applying for house loans. They forbid redlining as well.
According to the complaint, Patriot “engaged in a pattern or practice of unlawful redlining from 2015 through at least 2020.” “Patriot refrained from offering home loans and other mortgage services in neighborhoods in and around Memphis, Tennessee, that are predominantly Hispanic and Black.”
According to the DOJ, Patriot engaged in redlining between 2015 and 2020, placing all of its mortgage loan officers, branches, and loan production offices in mostly white communities. Additionally, the bank was charged with not promoting in certain areas.
Even if the bank may have received loan applications from applicants in locations where Black and Hispanic people predominate, the Justice Department noted that the applicants were “disproportionately white.” In areas of color, other banks “received nearly 3.5 times as many loan applications,” the agency also discovered during the course of the six-year period.
In comparison to other lenders in a similar situation, the complaint claims that Patriot generated disproportionately fewer loan applications and home loans from majority-Black and Hispanic neighborhoods in and around Memphis during each year of the relevant time period as a result of the aforementioned practices.
In contrast, Patriot Bank “originated a greater number of mortgage loans in Black and Hispanic areas in the city of Memphis than hundreds of other lenders,” according to bank officials, who also stated they do not understand why the DOJ “pursued this matter.”
According to a statement from Patriot Bank, the company “ranked 14th out of 482 lenders in Memphis’ minority areas in 2021 and 15th out of 534 lenders in 2022.” “From 2015 to the present, Patriot consistently placed first, second, or third in Tipton County when it comes to lending to minority areas.”
A little over $1.3 million of the settlement money will go toward giving residents of communities predominately made up of Black and Hispanic people more access to house mortgage, home renovation, and home refinancing options. In addition, the bank plans to invest $375,000 in expanding its advertising and other outreach and credit-related initiatives targeted at the same neighborhoods. Additionally, $250,000 would go toward “community partnerships to provide services that increase residents of those neighborhoods’ access to residential mortgage credit.”
In accordance with the proposed consent order, the bank must also make sure that the city’s mostly Black and Hispanic communities are served by at least two mortgage loan officers, and that a director of community lending is hired to oversee the ongoing expansion of lending in these areas.
Keith Barger, vice chairman of Patriot Bank and CEO of Patriot Bank Mortgage, stated, “Patriot is happy to continue with its existing initiatives that demonstrate the bank’s commitment to communities of color. The actions described in the consent order embrace the programs that Patriot has already had in place for years.”
The bank was founded in 2001 and now operates eight full-service locations: in Shelby County, at Millington; in Tipton County, at Covington, Covington South, and South Tipton; and in Shelby County, at Arlington, Collierville, Rosemark, and Raleigh Springs.
U.S. Attorney Kevin G. Ritz for the Western District of Tennessee stated, “For far too long, practices like redlining and discriminatory lending have been used to undermine the promises of our economic system.” In addition to making sure banks and lenders give communities of color equal access to credit and lending opportunities, our office is dedicated to upholding fair lending regulations. The signing of this deal with Patriot Bank is a significant step toward upholding economic justice and supporting Memphis’ communities of color as they begin to own companies, purchase homes, and live the American Dream.
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