Associated Banc-Corp in Green Bay, Wis., agreed to expand mortgage lending in minority neighborhoods to settle a federal probe into its fair-housing loan practices.

The conciliation agreement, reached on Friday, settles a U.S. Department of Housing and Urban Development's investigation into loan practices between 2008 and 2011. The $27 billion-asset Associated projected that new lending programs, combined with its existing lending, will generate about $200 million in new loans in targeted areas over the next three years.

Associated "will fully comply with the agreement," Philip Flynn, chief executive, said in a news release. "We agree with HUD that we can improve our performance in some of the communities and neighborhoods we serve."

HUD had alleged that Associated disproportionately denied loan applications made by black and Hispanic borrowers. The conciliation agreement included a denial by Associated that it engaged in discriminatory lending practices.

Associated said the terms of the agreement will not have a material impact on its financial results.

Associated's new initiatives will include enhanced training, new branch locations, new loan production offices, and expanded financing and home-repair grants. Associated will also invest in increased outreach, financial education and marketing to promote the changes.

Subscribe Now

Authoritative analysis and perspective for every segment of the mortgage industry

30-Day Free Trial

Authoritative analysis and perspective for every segment of the mortgage industry