Southport Bank Resolves Mortgage Lending Discrimination Allegations
Allegations of mortgage lending discrimination have been resolved between the Justice Department and Kenosha, Wis.-based Southport Bank.
As part of the settlement, Southport Bank will pay $687,000 to African-American and Hispanic wholesale mortgage borrowers.
The Justice Department’s compliant, filed in the U.S. District Court for the Eastern District of Wisconsin, alleged that the financial institution charged hundreds of borrowers who have this type of ethnicity higher fees than white borrowers on wholesale mortgage loans, which would violate the Fair Housing Act and Equal Credit Opportunity Act.
The lawsuit originated from a 2012 referral by the Federal Deposit Insurance Corporation to the DOJ’s Civil Rights Division. Southport is regulated by the FDIC.
Under the proposed settlement, which is still subject to court approval, a list of individuals who were victims of this discrimination will be identified by the U.S. Those eligible borrowers that can receive compensation will be notified by Southport, all while the DOJ monitors the bank to make sure the compensation process is being handled properly.
According to the DOJ, Southport cooperated fully during the investigation into its lending practices and agreed to settle this matter without contested litigation.
Currently, Southport is not engaged in the business of wholesale home mortgage lending. But if the bank decides to reenter this type of business, it will have to implement policies and practices that are designed to prevent and detect potential fair lending violations.
“The Department of Justice, through both the Civil Rights Division and my office, remains steadfast in its commitment to identifying, investigating, and addressing patterns and practices of racial and national origin bias in the extension and management of mortgage loans,” said James Santelle, U.S. attorney for the Eastern District of Wisconsin.
“As reflected by this settlement, we are animated not only by the all-important mandates of the Fair Housing Act and the Equal Credit Opportunity Act but also by our much-related interest in ensuring that all Americans are afforded economic opportunities and financial options in this most basic aspect of life—housing.”