Department of Justice Announces Initiative to Confront Redlining

In Summary

The DOJ, along with the Consumer Financial Protection Bureau and the Office of the Comptroller of the Currency, has taken action against Trustmark National Bank for discrimination.

The Department of Justice (DOJ) announced in a news release that they will be launching its Combatting Redlining Initiative. According to Investopedia, the definition of redlining is “a discriminatory practice that puts services (financial and otherwise) out of reach for residents of certain areas based on race or ethnicity.” 

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This initiative highlights the DOJ’s aggressive efforts to address the issue of redlining, as it is not allowed by the Equal Credit Opportunity Act and the Fair Housing Act. 

“Lending discrimination runs counter to fundamental promises of our economic system,” said Attorney General Merrick B. Garland in the news release. “When people are denied credit simply because of their race or national origin, their ability to share in our nation’s prosperity is all but eliminated. Today, we are committing ourselves to addressing modern-day redlining by making far more robust use of our fair lending authorities. We will spare no resource to ensure that federal fair lending laws are vigorously enforced and that financial institutions provide equal opportunity for every American to obtain credit.” 

RELATED: Lawsuit: Indiana Bank Discriminates Against Black Mortgage Borrowers

Throughout the years, redlining has had negative consequences for American families. Homeownership has been the primary way of building wealth and access to mortgage lending services has been a problem for people of color, according to the DOJ. 

According to Urban Institute, the racial homeownership gap between Black and white families is larger today than in 1960. 

RELATED: Justice Department Reviewing Policies on Transgender Inmates

“We know well that redlining is not a problem from a bygone era but a practice that remains pervasive in the lending industry today,” said Assistant Attorney General Kristen Clarke for the Justice Department’s Civil Rights Division in the news release. “Our new Initiative should send a strong message to banks and lenders that we will hold them accountable as we work to combat discriminatory race and national origin-based lending practices.” 

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