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Press Release

Justice Department Reaches Settlement with Community State Bank Regarding Alleged Lending Discrimination in Michigan

For Immediate Release
Office of Public Affairs

Community State Bank of St. Charles, Mich., will open a loan production office in an African-American neighborhood in Saginaw, Mich., invest $165,000 in majority African-American areas in and around Saginaw and take other steps as part of a settlement to resolve allegations that it engaged in a pattern or practice of discrimination on the basis of race, the Justice Department announced today.


The settlement, which remains subject to court approval, was filed in conjunction with the department’s complaint in the U.S. District Court for the Eastern District of Michigan. The complaint alleges that Community State Bank violated the Fair Housing Act and the Equal Credit Opportunity Act (EOCA), which prohibit financial institutions from discriminating on the basis of race in their lending practices. The lawsuit alleges that Community State Bank between 2006 and 2009 served the credit needs of the residents of predominantly white neighborhoods in the Saginaw and Flint metropolitan areas to a significantly greater extent than it served the credit needs of majority African-American neighborhoods. Those neighborhoods are easily recognized because the Saginaw area has long had highly-segregated residential housing patterns, especially for African-Americans.


“The complaint filed today shows that the practice of drawing lending areas with boundaries that exclude borrowers in predominately minority neighborhoods is not just a shameful historical practice,” said Thomas E. Perez, Assistant Attorney General for the Justice Department’s Civil Rights Division. “We are pleased that Community State Bank will improve access to responsible and affordable credit to qualified borrowers in Saginaw’s minority neighborhoods.”


Barbara McQuade, the U.S. Attorney for the Eastern District of Michigan added:  “Today’s settlement will bring badly needed resources to Saginaw and the surrounding areas.  It will broaden opportunities for home ownership and home improvement for families who live in neighborhoods where credit has been unlawfully limited.  We appreciate the bank’s cooperation in resolving this case.”


The lawsuit originated from a referral by the Federal Deposit Insurance Corporation (FDIC) to the Justice Department’s Civil Rights Division. Community State Bank is regulated by the FDIC.


Under the settlement, Community will invest $75,000 in a special financing program to increase the amount of credit the bank extends to majority African-American neighborhoods in and around Saginaw, $75,000 in partnerships with organizations that provides credit, financial, homeownership, and/or foreclosure prevention services to the residents of these neighborhoods, and $15,000 in outreach that promotes its products and services to potential customers in these neighborhoods. Community also will open a loan production office in a majority African-American neighborhood of Saginaw and conduct fair lending training for its employees. The agreement also prohibits Community from discriminating on the basis of race in any aspect of a credit transaction.


The Justice Department’s enforcement of fair lending laws is conducted by the Fair Lending Unit of the Housing and Civil Enforcement Section in the Civil Right Division.  Since the Fair Lending Unit was established in February 2010, it has filed or resolved 23 lending matters under the Fair Housing Act, the ECOA and the Servicemembers Civil Relief Act.  The settlements in these matters provide for a minimum of $660 million in monetary relief for impacted communities and more than 300,000 individual borrowers. The attorney general’s annual reports to Congress subject to the ECOA highlight the department’s accomplishments in fair lending and are available at .


This settlement was accomplished as part of the Financial Fraud Enforcement Task Force’s (FFETF) Non-Discrimination Working Group which focuses on discrimination in the housing and finance markets and is co-chaired by Assistant Attorney General for the Civil Rights Division Tom Perez. The Civil Rights Division, the U.S. Attorney’s Office for the Eastern District of Michigan and the FDIC are members of the FFETF, an interagency initiative, established by President Obama in 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes. For more information on the task force’s efforts, visit .


Additional information about fair lending enforcement by the Justice Department can be obtained from the Justice Department’s website at .

Related Materials:

Community Complaint
Community Consent Order

Updated July 8, 2022

Fair Housing
Press Release Number: 13-061