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9:15 AM / Wednesday June 29, 2022

26 Jun 2011

Missouri bank settles with feds over allegations of discrimination

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June 26, 2011 Category: Color Of Money Posted by:

minority news

 

WASHINGTON – The Justice Department announced that Midwest BankCentre will open a full-service branch in an African American neighborhood and invest approximately $1.45 million in majority African American areas of the St. Louis metropolitan area as part of a settlement to resolve allegations that they engaged in a pattern or practice of discrimination on the basis of race and color.

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The settlement, which remains subject to court approval, was filed in conjunction with the department’s complaint in the U.S. District Court for the Eastern District of Missouri.

 

The complaint alleges that Midwest BankCentre violated the Fair Housing Act and the Equal Credit Opportunity Act, which prohibit financial institutions from discriminating on the basis of race and color in their mortgage lending practices. The lawsuit alleges that Midwest BankCentre has served the credit needs of the residents of predominantly white neighborhoods in the Missouri portion of the St. Louis metropolitan area to a significantly greater extent than they have served the credit needs of majority African American neighborhoods.

 

Those neighborhoods are in and to the north and west of the city of St. Louis. They are easily recognized because t he Missouri portion of the St. Louis metropolitan area has long had highly-segregated residential housing patterns, especially for African Americans.

 

“Lending discrimination deprives communities of access to credit and leaves the residents of minority neighborhoods vulnerable to predatory lenders. This type of discrimination is part of the web of intolerable practices that stripped vast amounts of wealth from communities of color in the last decade,” said Thomas E. Perez, Assistant Attorney General for the Justice Department’s Civil Rights Division. “We are pleased that Midwest BankCentre has begun working with community groups and agreed to invest and take creative steps to build credit in an area that has been long been neglected by the banking community.”

 

“Racial or other illegal discrimination has no place in our credit markets,” said Federal Reserve Board Governor Elizabeth A. Duke. “We are pleased that this settlement is designed to expand fair access to credit.”

 

Under the settlement, Midwest BankCentre will invest $900,000 in a special financing program to increase the amount of credit the bank extends to majority African American areas in the Missouri portion of the St. Louis metropolitan area, spend $300,000 for consumer education and credit repair programs, and spend $250,000 for outreach to potential customers and promotion of their products and services. Midwest BankCentre will also open a full-service branch in a majority African American area within the Missouri portion of the St. Louis metropolitan area and conduct fair lending training for its employees. The agreement also prohibits Midwest BankCentre from discriminating on the basis of race or color in any aspect of a residential real estate-related or credit transaction.

 

The lawsuit originated from information gathered by the Metropolitan St. Louis Equal Housing Opportunities Council and provided to the Department of Justice in 2009, as well as a 2010 referral by the Board of Governors of the Federal Reserve System to the Justice Department’s Civil Rights Division.

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