RECENT REDLINING CASE

On October 2, 2014 the Department of Housing and Urban Development (HUD) announced that it has negotiated a Conciliation Agreement with Midland States Bancorp, resolving allegations that the bank avoided doing business in predominantly African American and Hispanic neighborhoods in St. Louis, Missouri and northern Illinois in violation of the Fair Housing Act. Midland is a community bank based in southern Illinois.

The settlement is the result of a housing discrimination complaint filed by Metropolitan St. Louis Equal Housing and Opportunity Council (EHOC).  EHOC’s complaint alleged  the bank delineated its service area in a discriminatory manner that excluded areas of high minority concentration, a practice known as redlining.  EHOC’s complaint also alleged that the bank located branches in a manner that did not give equal access to customers based on race and national origin, and failed to market residential real estate loans in African American and Hispanic communities.

Under the terms of the agreement, Midland agreed to:

  • Originate $8 million in mortgage loans in majority-minority neighborhoods over the next three years, and establish a $550,000 Subsidy Fund to provide discounted home purchases or home refinancing loans in majority-minority markets in St. Louis, Central Illinois/Champaign, and Northern Illinois and/or Joliet;
  • Originate $3 million in home repair loans in majority-minority census tracts, and establish a $400,000 Subsidy Fund for affordable home repair loans that will assist homeowners in majority-minority census tracts in St. Louis and northern Illinois, including Joliet, who experienced financial distress and deferred maintenance on their properties, and
  • Originate an aggregate of $4 million in loans for multifamily housing located in majority-minority census tracts in St. Louis and northern Illinois over the next three years.

In addition, the bank will open a full-service branch in Joliet, Illinois, a loan production branch in St. Louis, and, tentatively, a full service branch in St. Louis. All of the branches will be located in majority-minority census tracts.

The agreement also provides funding for affirmative marketing to African Americans and Hispanics, financial education for individuals and small businesses, support for training and education, and $200,000 for EHOC.

A copy of the conciliation Agreement is available  here.

 

Note: This article was published earlier and some regular readers were unable to access it. We apologize if you had problems accessing the article and for sending it to some of you twice.

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