Tags: BancorpSouth | discrimination | redlining | loans

Regulators Fine BancorpSouth $10.6 Million for Redlining

Image: Regulators Fine BancorpSouth $10.6 Million for Redlining

Wednesday, 29 Jun 2016 04:57 PM

The Department of Justice and the Consumer Financial Protection Bureau fined Mississippi-based BancorpSouth $10.6 million, alleging the bank deliberately discriminated against minorities in its lending practices.

BancorpSouth, a medium-sized regional bank with $10.6 billion in assets, deliberately avoided building branches in minority neighborhoods in Memphis, Tennessee from at least 2011 to 2013. The bank also denied loans to African Americans and other minorities when compared to neighborhoods with smaller minority populations, the Justice Department and CFPB said, and those minorities who were given loans were given higher interest rates when compared to non-minorities.

While BancorpSouth is based in Tupelo, Mississippi, the case deals with BancorpSouth's presence in Memphis. The bank had 22 branches in the Memphis area between 2011 and 2013, all of which were located outside neighborhoods with large minority populations. Maps provided by the regulators also showed nearly all BancorpSouth's loans originated outside minority neighborhoods of Memphis as well.

"BancorpSouth's discrimination throughout the mortgage lending process harmed the people who were overcharged or denied their dream of homeownership based on their race, and it harmed the Memphis minority neighborhoods that were redlined and denied equal access to affordable credit," said CFPB Director Richard Cordray in prepared remarks.

If approved by the court, BancorpSouth Inc. will provide $4 million in direct loan subsidies in minority neighborhoods in Memphis, spend at least $800,000 on community programs and minority outreach, $2.78 million to African American customers who were overcharged or denied loans as well as a $3 million penalty.

A representative from BancorpSouth was not immediately available to respond to the allegations.

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The Department of Justice and the Consumer Financial Protection Bureau fined Mississippi-based BancorpSouth $10.6 million, alleging the bank deliberately discriminated against minorities in its lending practices.
BancorpSouth, discrimination, redlining, loans
261
2016-57-29
Wednesday, 29 Jun 2016 04:57 PM
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