Feds close $22 million redlining order with lender early

Feds have terminated a consent order against a mortgage lender feds accused of "systemic racism" in the Philadelphia region.

A federal judge Monday approved the government's request to terminate its deal with Trident Mortgage, just over two years before it was set to expire. Attorneys with both the Consumer Financial Protection Bureau and the Department of Justice told a Pennsylvania court the long-defunct lender was in compliance with its $22.4 million settlement terms.

The case was filed in 2022 in a spate of redlining enforcement by the Biden administration. The Trump administration has sought to reverse those actions, asking courts in recent weeks to end at least two additional redlining consent orders against bank lenders.

Trident did not oppose the motion, according to the feds' request filed May 23. The company's obligations were overseen by affiliate HomeServices of America, which is a subsidiary of the Berkshire Hathaway conglomerate. 

An attorney for Trident deferred comment to the company, and a spokesperson for Home Services of America said it did not have a comment at this time.

The CFPB, DOJ and federal attorneys didn't respond to requests for comment Tuesday.

Officials slammed Trident Mortgage as a "very, very bad actor"

Trident was accused of violating fair lending laws between 2015 to 2019 in majority-minority neighborhoods across Philadelphia, Camden, New Jersey and Wilmington, Delaware. The company had 53 loan officers in the Philadelphia metropolitan area, but just 2 in majority-minority neighborhoods, according to the prosecutors' complaint. 

The company conducted over a dozen email marketing campaigns in which all customers appeared to be white, and overwhelmingly advertised in majority-white neighborhoods. Feds highlighted emails shared by mortgage employees chiding properties in "ghetto" neighborhoods, and sharing racial slurs and pejorative language against minorities. 

Then-state attorney general and current Pennsylvania Governor Josh Shapiro called Trident's activity "systemic racism, pure and simple," while former CFPB director Rohit Chopra called the subject of the four-year investigation a "very, very bad actor."

The firm was subject to one of the larger redlining settlements of the Biden administration, including implementing an $18.4 million mortgage loan subsidy fund in minority neighborhoods. The company, which went out of business in 2020, also paid a $4 million penalty to the CFPB. 

Feds including the DOJ and CFPB prosecutors behind the original settlement told the court last week Trident was substantially in compliance with other terms of the consent order.

Feds are winding down other redlining punishments

The DOJ last week asked a judge to end a consent order with New Jersey-based Lakeland Bank two years early, a move opposed by fair housing advocacy groups. The lender agreed in 2022 to fund a $12 million loan subsidy for residents of neighborhoods it allegedly excluded between 2015 and 2021.

Separately, a federal judge last month agreed to wrap up early a $5 million consent order with Trustmark National Bank, which was accused of discriminating against Black and Hispanic borrowers in Memphis between 2014 and 2018.

In a more unprecedented move, the CFPB has asked a federal judge in Chicago to reverse an already-agreed-upon $105,000 settlement with Townstone Financial, over longstanding accusations against that brokerage. The court has yet to rule on that motion.