North Carolina-based Fidelity Bank will pay $1 million to settle allegations brought by the U.S. Department of Housing and Urban Development (HUD) that the lender engaged in unfair lending practices against minority mortgage applicants.
The conciliation agreement stems from a complaint that was filed by the Fair Housing Project, Legal Aid of North Carolina Inc., a HUD Fair Housing Initiatives Program agency based in Raleigh, N.C., alleging that the bank denied or made housing and home mortgage loans unavailable because of race, which is a violation of the Fair Housing Act, HUD says in a release.
“Whether intentional or not, stark disparities exist in lending patterns and access to credit along racial and ethnic lines,” says Gustavo Velasquez, assistant secretary for fair housing and equal opportunity for HUD. “HUD remains committed to not only enforcing the law, but also facilitating productive relationships between lenders and advocacy groups that help make lenders more aware of their obligations under the Fair Housing Act.”
Under the agreement, Fidelity will make investments and community development loans in predominantly minority census tracts. At least 40% of these loans are to specifically promote affordable housing.
Fidelity has earmarked at least $1 million, which will be distributed over the next two years, HUD says in its release.
In addition, the bank will display a HUD Fair Housing poster – as well as its non-discrimination policies (in English and in Spanish) – at its Oberlin Road branch in Raleigh.
In addition, the bank is to provide fair lending training to staff, including loan originators and employees engaged in loan processing and underwriting.