Patriot Bank Secures Deal With Department of Justice To Resolve Lending Discrimination Claims

Patriot BankPatriot Bank has secured a deal with the Department of Justice. The agreement resolves allegations that the bank engaged in a pattern or practice of lending discrimination. Black and Hispanic residents accused the bank of redlining in majority-Black and Hispanic neighborhoods in Memphis, Tennessee.

Redlining is an illegal practice. It is where lenders avoid providing mortgages to individuals living in, or seeking to live in neighborhoods with large minority populations.

Patriot avoided providing mortgages to majority-Black and Hispanic neighborhoods in Memphis from 2015 through 2020. The bank also discouraged people seeking credit in those communities from obtaining home loans.

The DOJ found that Patriot’s lending was also focused disproportionately on white areas around Memphis. Over the same six-year period, other banks received nearly 3.5 times as many loan applications compared to Patriot in majority-Black and Hispanic neighborhoods in Memphis. 

The DOJ Consent Deal With Patriot Bank

The proposed consent order states Patriot will invest $1.9 million in communities of color in Memphis.

Specifically, Patriot will:

  • Invest at least $1.3 million in a loan subsidy fund to increase access to home mortgage, home improvement and home refinance for residents of majority-Black and Hispanic neighborhoods;
  • Spend $375,000 for advertising, outreach, consumer financial education and credit counseling focused on majority-Black and Hispanic neighborhoods;
  • Spend $225,000 on community partnerships to provide services that increase residential mortgage credit access for residents of those neighborhoods;
  • Ensure at least two mortgage loan officers are dedicated to serving majority-Black and Hispanic neighborhoods in the Bank’s service area;
  • Employ a Director of Community Lending who will oversee the continued development of lending in communities of color; and
  • Continuously assess the communities’ credit needs throughout the term of the consent order.

The department opened its investigation into Patriot’s lending practices after receiving a referral from the bank’s regulator, the Board of Governors of the Federal Reserve System. Patriot cooperated with the department’s investigation. Patriot Bank also worked with the department to resolve the redlining allegations.

Read More About Lending Discrimination And Red-Lining On


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