First Tennessee Bank To Pay $1.9 Million To Resolve Fair Housing Complaint

Posted by Patrick Barnard on February 01, 2016 No Comments

Memphis-based First Tennessee Bank will pay $1.9 million to resolve allegations brought by the U.S. Department of Housing and Urban Development (HUD) that the bank discriminated against African-American and Hispanic applicants by denying them mortgage loans and by failing to place bank branches in minority-concentrated areas – both violations of the Fair Housing Act.

The agreement stems from a complaint filed by the National Community Reinvestment Coalition (NCRC) after a review showed that the bank denied loan applications from African-American and Hispanic borrowers at disproportionate rates and failed to place bank branches in minority-concentrated areas in the Tennessee cities of Chattanooga, Knoxville, Memphis and Nashville.

As per the agreement, First Tennessee Bank will establish a $1.5 million subsidy fund to provide interest rate reductions on home mortgages. The fund will also be used to provide down payment or closing cost assistance to qualified borrowers in sections of the aforementioned cities.

In addition, First Tennessee Bank has agreed to partner with one or more community-based organizations to provide home repair or other grants to help existing homeowners repair their properties in predominantly minority communities or, instead, to provide credit, financial, homeownership or foreclosure prevention services to residents in the affected areas.

Specifically, the bank will contribute $270,000 over three years to support these partnership efforts and an additional $105,000 to fund similar services to be provided directly by the NCRC.

In addition, the bank will pay $25,000 in damages to the NCRC.

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