Good afternoon, it is an honor to be on this call today with United States Attorney Paul Fishman and Director Richard Cordray of the Consumer Financial Protection Bureau to discuss the Justice Department and CFPB’s settlement with Hudson City Savings Bank for redlining discrimination in residential mortgage lending practices.
The Civil Rights Division is charged with upholding the most basic tenets of what it means to be an American – equal opportunity and equal justice. Fundamental to the promise of equal opportunity is equal access to credit. The Civil Rights Division is therefore committed to combating all aspects of discriminatory action by creditors in all forms of lending, and has pursued fair lending enforcement actions brought under the Equal Credit Opportunity Act, Fair Housing Act, and the Servicemembers Civil Relief Act. Our lending enforcement efforts in recent years have benefitted greatly from our partnership with the Bureau and the U.S. Attorney’s Offices, and today’s settlement again demonstrates the deep partnership that the Justice Department and CFPB have built to enforce our nation’s fair lending laws.
Redlining is not a vestige of the past. Banks continue to build and structure their lending operations in a way that avoids or fails to meaningfully serve communities of color, based on assumptions about the financial risk that residents of these communities pose to the bank’s bottom line. The resulting lack of presence of banks exposes these communities to less desirable financial products and predatory lending practices. The Civil Rights Division has vigorously enforced the Equal Credit Opportunity Act and the Fair Housing Act in recent years to remedy residential mortgage redlining across the country, including cases in Alabama, Missouri and Michigan, and we currently have an increased number of active mortgage redlining investigations.
This settlement with Hudson City represents a continuation of those efforts. And in fact, this settlement is the Civil Rights Division’s largest settlement ever both in monetary terms and in terms of geographic scope, encompassing not only the New York/New Jersey metropolitan area – the largest metropolitan area of the country – but also the Philadelphia metropolitan area, which includes southern New Jersey, and the Bridgeport, Connecticut, metropolitan area.
Today’s agreement is a strong and robust one. Banks and lending institutions should be on notice that the Justice Department continues to focus on discriminatory conduct in mortgage lending and that such conduct will not be tolerated. We recognize that redlining is part of a web of unfair and discriminatory practices that has harmed communities of color in the last decade. In the last five years alone, the Division has settled 20 suits alleging discrimination in mortgage lending not only in the context of redlining, but also in the context of pricing discrimination and steering. We encourage all lenders to proactively identify responsible lending opportunities that exist in predominantly minority neighborhoods within their market areas and to lend fairly to residents of these communities.
The Justice Department’s enforcement of fair lending laws and the Servicemembers Civil Relief Act is conducted by the Housing and Civil Enforcement Section in the Civil Right Division and I wish to thank them for their work on this matter. Since 2010, the Civil Rights Division has provided approximately $1.3 billion in monetary relief for individual borrowers and impacted communities through its enforcement of the Fair Housing Act, ECOA and the SCRA.
I also want to commend our partners at the U.S. Attorney’s Office and the Consumer Financial Protection Bureau for their work on this case. The filing of this complaint and proposed consent order marks a significant step in our efforts to ensure that all people have equal opportunity to access the American Dream.