By John Zasada, JD, CAMS – Shareholder, Financial Institutions Group

The Consumer Financial Protection Bureau (CFPB) and the Department of Justice (DOJ) ordered Trident Mortgage Company to pay over $22 million for violating the Equal Credit Opportunity Act (Regulation B). It was determined that the company intentionally discriminated against families living in majority-minority neighborhoods in the greater Philadelphia area.

Problematic conduct by Trident Mortgage Company included the following:

  • Loan officers, assistants and other employees received and distributed e-mails containing racial slurs and racist content. In addition to using racist tropes and terms, communications sent on work e-mails included content specifically related to real estate properties’ locations and appraisals. The racist content also targeted the people living in majority-minority neighborhoods.  
  • Loan officers worked out of 53 different offices in the Philadelphia MSA, the locations of which were displayed on the company’s website. Of those offices, 51 were in majority-white neighborhoods. The other two offices were in neighborhoods with minority groups representing roughly 50% of the population. All 23 offices within the Philadelphia and Camden metropolitan areas within the lending area were in majority-white neighborhoods.
  • Between 2015 and May 2018, Trident Mortgage Company conducted 15 direct mail marketing campaigns. All the individuals pictured in the campaigns’ marketing materials—both models and employees—appeared to be white. These direct mail marketing campaigns would have discouraged applicants from majority-minority neighborhoods. Additionally, its marketing materials were targeted to majority-white neighborhoods. For instance, the company’s open house flyers were overwhelmingly concentrated in majority-white neighborhoods, and its online advertisements appeared for home listings overwhelmingly located in majority-white neighborhoods.

According to Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division: “This settlement is a stark reminder that redlining is not a problem from a bygone era. Trident’s unlawful redlining activity denied communities of color equal access to residential mortgages, stripped them of the opportunity to build wealth and devalued properties in their neighborhoods.”

For more information on how to avoid redlining and other Regulation B violations, contact our regulatory compliance specialists today.